100% tax on energy drinks and tobacco products in UAE

VAT in UAE will come into force from January 1, 2018.

The excise tax, an indirect type of taxation, to discourage the consumption of products that negatively impact the environment and more importantly, people's health.

The Federal Tax Authority of UAE has announced a 100% tax on tobacco products and energy drinks, as well as a 50% tax on carbonated beverages, beginning in the fourth quarter of 2017.

The valued added tax (VAT) will be imposed on imported goods and services unless explicitly exempted by the law. According to the law, an imported commodity or service could be subject to VAT by 5% or exemption from the tax.

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Businesses that import or supply goods or services that are exempted from tax need not register, which also applies to businesses that import commodities or services that are not subject to the VAT.