Guide to Receiving, Storing and Moving Excise Goods within UAE
Excise goods are products containing alcohol, mineral oil, and tobacco.
In a bid to move excise goods within the UAE, there are some necessary information and key regulations to consider. An important one involves persons and premises with the relevant approval from the Federal Tax Authority of UAE.
For businesses, obtaining an excise duty suspension could be pretty tedious. Hence the need for employing a 3PL (third-party logistics) provider.
3PL (Third-Party Logistics)
Third-party logistics (or 3PL) providers offer comprehensive solutions to enterprise supply chains in storing, transporting, and fulfilling orders.
Basically, they allow businesses to outsource tasks concerning service operations. This involves using third-party companies to carry out and complete tasks in the supply chain.
Working with a 3PL encourages the growth of businesses by providing long-term flexibility and adequate resources to meet increasing product demands. Also, a 3PL offers expertise across the supply chain, leaving businesses to focus on core aspects of their operations.
A 3PL that ships high-volume orders at lower rates has a tax-free excise warehouse and comes with adequate staffing. All these help businesses to save time and money, increase overall cost-effectiveness, and maximize profits.
Overall, the benefits of a 3PL come down to improved response time, timely delivery of goods and services, and properly focused operations. As a result, businesses will be successful in creating and maintaining optimum customer satisfaction.
In moving excise goods, 3PLs are especially important in operating under excise duty suspension or deferment. But what exactly is excise duty?
Excise duties are indirect taxes levied on specific goods.
These are typically products that are harmful to the health of consumers. In addition, they are damaging to the environment.
An excise goods example usually includes:
- Carbonated drinks (sparkling water is an exception)
- Electronic smoking devices and tools
- Energy drinks
- Liquids used in electronic smoking tools and devices
- Sweetened drinks
- Tobacco and tobacco products
Essentially, the end consumers are not responsible for paying this tax to the government. However, they usually pay more for these products, ensuring they cover the full costs of the tax.
For these reasons, the list of excise goods includes much more expensive products. This helps to impose the excise duty by reducing the consumption of these goods and raising revenues to be allocated for public services.
Receiving Excise Goods upon Import Arrival
The Federal Tax Authority implements regulations concerning the movement of excise goods. And an important rule is that moving excise goods within the UAE is permitted for only persons and premises with the relevant approval.
Excise tax clearing companies declare the Excise Goods that will be imported into the UAE on behalf of importers. Also, the quantities of the particular products that will be consumed in the UAE. And these carry their respective tax.
Where applicable, excise tax deferment is allowed up to the quota of the guarantee amount held by the FTA in respect of the guarantee paid by registered clearing companies or after the revised guarantee amount.
Storing Excise Goods in Designated Zone
Businesses intending to receive, store, and move goods need to have an approved excise (or excise tax-free) warehouse.
Goods subject to excise duty can be stored on the premises without paying the required tax depending on the specified conditions. This is referred to as excise duty suspension. And the goods that can be stored in an excise warehouse include alcohol, tobacco, and energy products.
Persons or businesses involved with storing excise goods must also register as warehouse keepers. Or allocate these operations to a certified warehouse keeper.
Insight on Moving Goods into and Out of an Excise Warehouse
Across the UAE, the excise tax is currently applied on all excise goods. The current tax rates differ according to the respective products and are listed below:
- 50% for carbonated drinks
- 100% for tobacco products
- 100% for energy drinks
In order to move excise goods efficiently, the goods have to be cleared for excise duty suspension and are in ‘free circulation. Meaning the goods have cleared all import formalities and customs duties.
Specific declarations exist that a business/person needs to file when releasing goods from a designated zone. Some of these scenarios can be found below:
- If you release excise goods into free circulation in the UAE from a designated zone where there’s a check by the Customs Department,
- If you move excise goods into free circulation out of a designated zone where there’s no check by the Customs Department,
- If you transfer excise goods from one designated zone to another,
- If you transfer goods from a designated zone to the border for export.
The various declaration forms can be found on the Federal Tax Authority website. They can be accessed within the ‘Excise Tax Returns and Declarations’ on the E-Services portal.
Pay or Defer Duty When Moving Excise Goods
When removing goods from an excise warehouse, it’s important that businesses pay the required excise duty. Or at least make sure all the removed goods are accounted for.
Payment details are available are on the FTA’s E-Service portal.
In a bid to defer paying excise duty on goods, persons/businesses need to obtain special permissions.
How Can Al Sharqi Help Businesses Who Import Excise Goods in UAE?
For businesses who import excise goods in UAE, it’s necessary to choose a brand with the quality tools and expertise to get the job done. At Alsharqi, we have the tools to keep our customers one step ahead of the competition.
Alsharqi will do the following;
- Take charge of all processes involved with the excise duty
- Move excise goods in and out of excise warehouse with ease
- Help in deferring duty when moving excise goods
We help businesses ship goods ranging from automotive and special cargo to agricultural produce, appliances & hardware.
Al Sharqi also connects businesses to the right partners all around the globe and readily solves business problems using up-to-date tools.
For more details, check here www.alsharqi.co.
Properly receiving, storing, and moving excise goods in UAE involves following guidelines laid down by the Federal Tax Authority.
Although the process may seem tedious, a 3PL logistic company like Alsharqi will help make things easier and put you ahead of competitors.
Our customer service team is happy to assist you with planing your next booking.