Taxation in the United Arab Emirates

[2][3] In January 2022, the UAE Ministry of Finance announced the implementation of a federal corporate tax starting June 2023.

[6] The federal government also levies excise taxes on alcohol, energy drinks, vaping liquids and devices, and cigarettes.

This includes detailed manuals, FAQs, and online tools to facilitate tax registration, filing, and payment.

Online Services: The FTA offers a digital platform where taxpayers can register for taxes, submit returns, and make payments.

The FTA’s efforts are essential in supporting the UAE’s economic goals by ensuring an effective and efficient tax system that aligns with international standards.

The Federal Tax Authority (FTA) overseas VAT collection and audits businesses to ensure compliance.

By increasing the prices of these products, the government aims to discourage consumption, promote healthier lifestyles, and reduce environmental harm.

The registration process includes warehouse management, where businesses store excise goods under specific conditions to defer tax payments.

Failure to comply results in penalties, which are part of the FTA’s effort to enforce transparent and accountable tax practices.

The introduction of excise tax in the UAE has generated significant revenue for the government while encouraging healthier consumer habits.

The higher prices have reduced the consumption of taxed items, particularly among younger demographics, contributing to improved public health outcomes.

Revenue generated from excise tax has been directed towards funding healthcare initiatives and other public services, reinforcing the government's long-term objectives for health and sustainability.

[10] These audits are often conducted at the workplace or at the other place of business of the involved party, as per the selection of the FTA; the person/business should be given a minimum of 5 days notice.

The auditor might ask for business records, in original and/or copies, and take samples of products and alternative assets as obtainable at the place at the time.

If something suspicious is found within the results of the audit which may impact the tax return, the authority might order a re-audit for more analysis.

In March 2021, FTA said that influencers on social media in the UAE or any users using online promotional activities should register for VAT and pay taxes if the value of the services they provide is more than AED375,000 in a 12-month period.

[14][15] Foreign tourists visiting the UAE are entitled to VAT refunds for purchases of items being exported with the traveller on their departure.

In the UAE, all entities that meet the specified criteria and thresholds for taxable profits are required to register for corporate tax.

Timely and accurate corporate tax return filing is essential to avoid penalties and legal consequences.

Abu Dhabi charges a 30% sales tax on alcohol, Dubai ended the practice in January 2023.