The UAE’s Federal Tax Authority has announced a 100 per cent tax on tobacco products and energy drinks, as well as a 50 per cent tax on carbonated beverages, beginning in the fourth quarter of this year.
The announcement came following the first meeting of the board of the UAE Federal Tax Authority in Dubai, which was presided over by Sheikh Hamdan bin Rashid Al Maktoum, Deputy Ruler of Dubai and Minister of Finance. The valued added tax (VAT) will be imposed on imported goods and services unless an explicit text in the law stipulates a zero per cent or exemption from paying the VAT, including foods, commercial buildings and hotel services. According to the law, an imported commodity or service could be subject to VAT by five per cent or exemption from the tax.
All businesses that import any commodity or services must register for the tax if their total imports – that are subject to VAT – exceed the obligatory registration limit, which is Dh375,000.