UAE publishes Cabinet Decision No. 52 and 55 of 2019

Cabinet Decisions No. 52 and 55 of 2019 have confirmed that with effect from 1 December 2019 Excise Tax will be expanded to cover sweetened drinks and electronic smoking devices and tobacco products. This means that there are less than two months for affected businesses to get ready for this change.

The Federal Tax Authority (FTA) has now published the following decisions:

• Ministerial Decision No. 236 of 2019 – Implementation of the Cabinet Decision No. 52 of 2019 On Excise Goods, Excise Tax Rates and the Methods of Calculating the Excise Price
• Ministerial Decision No. 237 of 2019 – Implementation of the Cabinet Decision No. 55 of 2019 On Excise Price for Tobacco Products

Ministerial Decision No. 236 of 2019 also includes details on Harmonized Systems (HS) codes for liquids used in electronic smoking devices and tools, electronic smoking devices and tools, excise price, and abrogation of conflicting legislation.

How can Deloitte help?

We have a dedicated team of Excise Tax specialists to help you get ready for the impending expansion of Excise Tax to sweetened beverages, electronic smoking devices and associated tools and liquids.

Areas where we can provide Excise Tax implementation support are:

1. Product classification

• Review of products to determine whether they are liable to Excise Tax and the associated registration obligations.
• Analysis of the potential impact of Excise Tax on current product costing, pricing and margin determination.

2. Impact assessment

• An Excise Tax Impact Assessment tailored to your business.
• Documentation of movements and transactions subject to Excise Tax, including:
  
  • Excise Tax registration and reporting obligations;
  • Identification of Excise Tax or cash flow cost mitigation opportunities; and
  • Assessment of Excise Tax readiness of your current IT systems in light of the new reporting requirements that were introduced in September 2019.

3. Registrations

Excise Tax Registrations must be completed via the relevant online application forms on the FTA’s e-services portal. We can assist you with registration procedures for both:

• Taxable Person Registration; and
• Excise Goods registration.

4. Compliance

We can review your Excise Tax Returns or Transitional Returns prior to the submission of these to the FTA in the following capacity:

• Review of figures provided by your business and supporting work papers and summary reports
• High-level testing and reconciliation of the data underlying Excise Tax return
• Review and recommendations on Excise Tax return process. 

5. Ad-hoc advisory services

We can answer any queries including queries you may have during the transitional period and following the introduction of Excise Tax on the new excisable products, including but not limited to:

• Drafting clarification requests to the FTA;
• Review of contracts; and
• Staff training sessions.