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Retail Sales Price Amendments in UAE
Retail Sales Price Amendments Services in Dubai, UAE
Excise Tax UAE and Its New Amendments
The UAE Federal Tax Authority (FTA) has implemented new procedures to make it easier for tax registrants to submit reconsideration applications and objections to the FTA’s decisions, as well as procedures for implementing the Tax Dispute Resolution Committee’s (TDRC) decisions, appeal procedures, controls to reduce administrative penalties, payment of penalties over time, and exemption from penalties.
Retail Sales Price Amendments Services in Dubai, UAE
What is Excise Tax In UAE & what are the latest amendments?
Excise tax is defined as an indirect tax paid on things that are damaging to human health and the environment. Pigouvian taxes or sin taxes are the names given to excise taxes throughout history. The aim of the excise tax in the UAE, on the other hand, is to reduce the usage of unhealthy and dangerous goods. The excise tax in the UAE is a small portion of the overall government revenue. The funds raised are used for supporting numerous beneficial projects for the public.
What are the items that fall under the Excise tax in the UAE?
Tobacco and tobacco products
Electronic smoking devices and tools
Liquids used in electronic smoking devices
Carbonated drinks
Energy drinks
Sweetened beverages
Businesses that engage with the import, production, sales, and storage of the above items are required to register for Excise Tax and comply with its regulations. Excise tax filing is an important aspect of tax reporting, and taxable persons must be precise in their declarations and excise tax filing.
What is the tax rate on excise goods?
Excise Items | Tax Rate |
Sweetened Beverages | 50% |
Carbonated drinks | 50% |
Electronics smoking devices and the refill liquid | 100% |
Energy Drinks | 100% |
How to calculate the UAE Excise?
On April 28th, 2021, the Federal Tax Authority published Decision No. 1. Keeping that in mind, changes were made accordingly to the calculation of the Average Retail Selling Price of Excise Goods in the UAE. The judgment covers both scenarios of excise items in the UAE.
Calculation of the Average Retail Selling Price (ARSP) in the UAE.
The calculation of ARSP of excise goods that are not meant for sale in the UAE.
Here is how you should calculate the Average Retail Price as per Article 1 for excise goods that you will sell in the UAE retail market.
Step 1: The taxable party must identify the excitable goods’ retail selling price (RSP) for the past 12 months to calculate the average retail selling price of the goods. There must be no VAT or Excise tax included in the valuation at this point.
Step 2: Divide the total estimated revenue for the previous 12 months by the total number of excise goods sold during that period.
Step 3: Calculate the total excise tax due on the revenue produced from the sale of excise items in the UAE by computing the excise tax on a single unit.
Step 4: This will calculate the average retail selling price of the excisable goods in the market before VAT.
Similarly,
Article 2 says excisable goods that are not meant for retail sale in the UAE. Such goods have different charges attached to their imports, customs fees, shipping costs, insurance fees, and expenses on importing such goods in the UAE. These fees directly impact the average retail price of excisable goods.
Scenario 1: If the imported goods are excisable but not for retail sale, but are used to make goods that are subject to the excise tax, the ARSP of the product is decided by the import value of the original excise good.
Scenario 2: When products are imported into the UAE but will be exported without being sold in the UAE’s retail market, the ARSP for excise duty on such products is calculated by the retail price of the good that will be exported.
Scenario 3: Goods manufactured in the UAE are part of excisable goods. Nevertheless, they are not sold for retail purposes in the UAE. The price at which the goods are manufactured before any discounts or offers decides the average retail selling price of the goods.
Things that a taxable person must be aware of the Excise Tax UAE Calculations
The new excise calculation revisions make it easier to comprehend how to approach items that are meant to be sold in the UAE or exported. By assessing the influence of indirect taxes on your business in the UAE, HayyaTax Accounting will help you learn how your firm can benefit from having improved cash flows. Any modifications that would impact the assessment of the ARSP of the items should be reported to the FTA. Get expert financial and accounting services to avoid any penalties. Contact us today to know more.
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Frequently Asked Questions on Excise Retail Sales Price Amendments in UAE
The Excise Retail Sales Price Amendment is the process through which businesses update the retail price of excise goods (such as tobacco, energy drinks, and sugary beverages) in the UAE. This ensures that the correct excise tax is applied to the updated product prices, in line with the Federal Tax Authority (FTA) regulations.
A business may need to amend the retail sales price of an excise product due to:
Changes in production costs or supplier pricing.
Market demand fluctuations requiring price adjustments.
Changes in excise tax rates or government policies.
Promotions or discounts that affect the retail price.
To amend the retail sales price, follow these steps:
Log in to the FTA’s e-Services portal.
Navigate to the Excise Tax section and select "Sales Price Amendment".
Enter the new retail price for the excise product(s).
Submit any supporting documentation, such as revised invoices or pricing lists.
Confirm the amendment and wait for FTA approval.
Required documents for submitting a retail price amendment include:
Updated pricing list or new invoice showing the revised retail price.
Explanation or justification for the price change (e.g., cost of goods increase, government tax rate change).
Product details (including excise tax product codes).
There are no set limits on how often businesses can amend the retail price of excise products, but amendments should be made whenever there are significant price changes due to factors like production cost increases, tax changes, or other market conditions. Always ensure the price amendments are in compliance with FTA guidelines.
Failure to amend the retail sales price of excise products when required can lead to:
Fines and penalties for incorrect pricing.
Audit scrutiny by the FTA, leading to further investigations.
Liability for underpaid excise taxes if prices are not updated correctly.
Potential delays in approval of product sales or legal consequences.
Retroactive price amendments are generally not permitted. Any amendments to the retail price should be made before the new price is applied to products sold to customers. It’s crucial to submit the price amendment in advance to comply with FTA regulations and ensure proper tax calculations.
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