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Excise Tax FAQs
1. What is Excise Tax?
It is a tax on consumption, classified as an indirect tax, and imposed on specific goods that are considered harmful to human health, society, or the environment. It is levied once at one stage of the supply chain (import or production).
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2. What are Excise tax goods and their percentages?
- Tobacco and its derivatives (100%)
- Pork and its products (100%)
- Alcoholic beverages (100%)
- Energy drinks (100%)
- Soft and sweetened drinks (50%)
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3. What is the retail selling price?
The value of the excise goods on which the tax is imposed shall be determined on the basis of their retail price, that is determined by the taxpayer or the standard price specified in the price list issued by the Tax Authority.
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4. When is Excise Tax being due?
Tax shall be due on the date on which Excise Goods are released for consumption unless they are in a tax-suspended situation.
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5.Who is obliged to register for Excise Tax?
Importer and producer of excise goods.
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6. Who is responsible to collect the tax of imported excise goods?
The General Administration of Customs collects the tax on imported excise goods by applying the prescribed category and value.
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7. Are penalties imposed for violations of the excise tax system?
Yes, penalties are applied for delays in registration, submission of returns, invalid data, or providing misleading statements.
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8. What does soft drinks mean?
Any beverages that contain gas except unflavored carbonated water, and any concentrates, powders, gels, or extracts that can be converted into soft drinks.
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9. What do we mean by sugar-sweetened beverages?
Any product with an added source of sugar or other sweeteners produced for consumption as a drink.
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10. What is the percentage of sugar or other sweeteners in the product on which the excise tax is imposed for sweetened beverages?
Excise tax is imposed on all sweetened beverages, regardless of the percentage of sugar or sweeteners.
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11. Is Excise Tax levied on sweetened beverages containing milk?
If sweetened beverages contain 75% or more of milk, VAT will not be applied.
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12. Are sugar-sweetened products subject to VAT and Excise Tax?
Yes.
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13. What are the main obligations of producers and importers of excise goods?
Register with the Tax Authority, obtain licenses, and submit tax returns within the specified period.
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14. What are energy drinks?
Any beverages marketed or sold as energy drinks that may contain stimulants or provide mental or physical stimulation.
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15. What are tobacco products?
Tobacco products include all goods mentioned in Chapter 24 of the GCC Common Customs Tariff.
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16. What is a tax warehouse?
A specific place where licensees are allowed to produce, transfer, store, or receive excise goods under a tax suspension status.
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17. What is the tax suspension status?
A situation in which the tax entitlement on excise goods is suspended.
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18. Why can't the user access the website?
A pre-authorized username must be available to log into the website.
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19. When shall the return be filed and Excise Tax be paid?
The return is filed within 30 days of the end of the tax period, and returns are submitted quarterly.
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