EXCISE TAX UAE: DIGITAL STAMPING SYSTEM ON CIGARETTES

The United Arab Emirates (UAE) Federal Tax Authority (FTA) has enacted a new law regulation that applies to cigarettes sold locally regardless of whether they are imported or packaged in the UAE. All cigarettes sold in the UAE must contain a new government-approved digital stamp from January 1, 2019. The stamp will allow the tax authority to digitally track cigarettes from production until they reach the consumer, to guarantee compliance with excise tax requirements on tobacco products.
Digital tax stamps will be placed on the packaging of tobacco products and registered in the FTA’s database. It will contain tax-related data that can be read using special devices. The stamps must be applied on specific products (i.e. Cigarettes) and in the exact position determined by FTA.

The decision requires the importer or local producer to issue an order to purchase the stamps according to procedures predetermined by FTA. No other person may trade, exchange, sell or supply these stamps; importers across the UAE may request the approved supplier to supply the stamps directly to the specific producer of excise goods, which may include foreign producers.

Federal Tax Authority Decision No. (3) of 2018 on Implementing the Marking Tobacco and Tobacco Products Scheme sets out the dates relevant to the scheme and the fees for the purchase of the marks, and will come into effect on 1 January 2019. This decision will be applicable only for cigarettes.
The following key points are included in the Decision:

  • Marks will be available for importers and producers to order from 1st January 2019.
  • From 1st May 2019, designated excise goods without marks will not be permitted to be imported into the UAE.
  • From 1st August 2019, designated excise goods without marks will not be permitted to be supplied in the UAE.

The fee for purchasing marks will be AED 0.084 per mark, to be paid by the importer or producer before the marks are issued to them. View our Excise Tax Service.

Last Updated: 6th December 2018
This article is contributed by: 

CA Vipin  Ahuja
Senior Manager, Taxation