Issue
This Public Clarification explains the Excise Tax obligations for stockpilers of sweetened drinks, electronic smoking devices and tools, or liquids used in such devices and tools, which are held for business purposes on the date Cabinet Decision No. 52 of 2019 on Excise Goods, Excise Tax Rates and the Methods of Calculating the Excise Price comes into effect i.e. 1 December 2019.
It also explains the Excise Tax obligations for stockpilers holding tobacco products on 1 December 2019, which have been subject to Excise Tax at a price lower than the minimum excise price introduced on such products by Cabinet Decision No. 55 of 2019 on the Excise Price for Tobacco Products.
Summary
Where a person expects to hold stock of sweetened drinks, electronic smoking devices and tools, or liquids used in such devices and tools for business purposes on 1 December 2019, the person should consider whether he would qualify as a stockpiler or not for Excise Tax purposes. Qualifying as a stockpiler will require the person to register for Excise Tax purposes with effect from 1 December 2019, and to pay Excise Tax on the stock on hand on 1 December 2019.
Similarly, where a person expects to hold stock of tobacco products on 1 December 2019 which have been subject to Excise Tax at a price below the minimum excise price, the person should consider whether he may qualify as a stockpiler in respect of these goods. Where a person does meet the provisions to be classified as a stockpiler, they will again have Excise Tax accounting obligations (and registration obligations, where not already registered) as a result.
Detailed analysis
When are excise goods considered 'stockpiled' in the UAE?
Excise goods are considered stockpiled in the UAE if the following conditions are met: