Selective tax on 6 commodities regarded harmful to human health, reveals DGOV

Maitha Al Ketbi, Staff Reporter

The Digital Government (DGOV) affirmed that there is an indirect selective tax imposed on 6 commodities which are regarded harmful to human health or the environment.

These are known as the "selective commodities", which include soft drinks, energy drinks, tobacco and its products.

The DGOV indicated that soft drinks include any drinks containing gas except for unflavoured carbonated water, any powders, gels or extracts from soft drinks which can be converted into soft drinks, and energy drinks including drinks which are marketed or sold as energy drinks containing stimulants or give mental or physical stimulation.

These include, for example, caffeine, taurine, ginseng, guarana, and any substances which have an identical or similar effect.

As for tobacco and its products, the DGOV said it includes all materials listed in Table 24 of the unified customs tariff for the GCC countries, to which other commodities added including liquids used in tobacco manufacturing tools, electronic smoking tools, and sweetened beverages.

Concerning the tax rate applied to soft drinks, electronic smoking tools and sweetened drinks is 50%, while the rate applied to tobacco products, energy drinks and liquids used in electronic smoking devices and tools is 100%, the DGOV pointed out.

Any person who imports selective goods into the UAE, produces them for consumption, and stores them according to certain cases, must register in the selective tax system, DGOV indicated.

Also, persons responsible for supervising a tax warehouse or designated area, warehouse keeper, and persons who store selective goods for commercial purposes and have no proof that the tax has previously been paid on those goods, have to register in the selective tax system.

The DGOV also affirmed that companies with taxable supplies and imports from abroad exceeding the mandatory registration limit of Dhs375,000 must register for the value-added tax.

For Business owners, they can optionally register for the value-added tax if their taxable supplies and imports from abroad are less than the mandatory registration limit, but exceeds the voluntary registration limit of Dhs187,500.

Any business owner may also register voluntarily if his business expenses exceed the voluntary registration limit, said the DGOV.

According to the DGOV, establishments can register for the value-added tax through Federal Tax Authority website, after creating an account.

The value-added tax is applied equally in all emirates of the UAE and all the free zones, with the exception of the free zones which are exempted by the Cabinet, the Government pointed out, adding that moving goods among the exempted free zones is free of tax as well.

The taxpayer must submit tax hand over tax returns to the Federal Tax Authority on a periodic basis, within 28 days of the end of the basic tax period, which extends three months for businesses whose annual revenues are less than Dhs150 million, and one month for businesses whose annual revenues are equal to or exceed Dhs150 million , the DGOV indicated, adding that the Authority may specify a different tax periods.

If the tax return is not submitted on the specified dates, certain fines will be imposed in accordance with Cabinet Resolution No 40 of 2017, regarding administrative fines imposed for violating tax laws in the UAE.