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Frequently Asked Questions on VAT

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When will Excise tax be refunded?

Excise tax is paid only once in the supply chain. Hence, all businesses that deal in excisable goods cannot obtain a refund of the excise tax paid on those goods, unlike VAT.

Still there are some cases where a refund of excise tax will be available:

  • If Excise tax has been already paid on an excise good, which is then produced in to a ‘new excise good’, on which excise tax is again due (e.g., Excise tax will be due on both the import of raw tobacco and once the tobacco has been manufactured into cigarettes).
  • If Excise tax has been already paid on an excise good which is then exported outside the UAE.
  • If there is an error while paying tax to the FTA.

In these scenarios, a business registered for excise tax can get the refund of the excise tax paid. The refund will be granted by allowing a deduction of the refundable amount from the tax due in the next excise tax return period.

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