Better make sure all your tax-related paperwork is in order…

On Sunday October 1, the UAE introduced a new excise tax law that saw the price of energy drinks and cigarettes rise by 100 per cent, with soft drinks seeing an increase of 50 per cent across the board. You can check out the full list of what products were affected here.

Since coming into effect, some retailers have expressed confusion regarding how the new tax works, with many having to wait until current stocks clear before being able to apply the new pricing structure.

That means that currently you might still be able to buy an energy drink or pack of cigarettes at pre-excise tax rates if you’re lucky. However, it seems that won’t be for much longer.

In an effort to make the tax as transparent as possible, the UAE Council of Ministers has issued a statement outlining the various penalties that can be incurred if shops are found to be violating the new law.

What kind of fines are we talking about here?

The base fine for any violation starts at Dhs500, with a maximum amount of three times the value of the tax on a particular transaction. So definitely not trivial.

Businesses can also face fines of Dhs10,000 for misplacing relevant records, with a subsequent violation increasing the fine to Dhs50,000.

The price tags of products in-store are required to display the full cost including the new tax, with a Dhs15,000 fine for non-compliance, and businesses selling tax-relevant products are expected to have their accounts in order starting from October 1.

Registration with the Federal Tax Authority is free of charge and you can find out more information here.

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