Qatar plans to apply Excise Tax on Sweetened Beverages
21 November 2024 – The General Tax Authority of the State of Qatar (GTA), in partnership with the Ministry of Commerce and Industry, organised a workshop on the upcoming intended expansion of the scope of excise tax to include Sweetened Beverages (SBs) produced in and imported into Qatar. In this alert, we provide key points discussed during the workshop below:
Key highlights
Scope and Coverage: Excise Tax is intended to be imposed on products produced and imported in Qatar that contains added sugar or its substitutes. The tax may apply to various products, including beverages, concentrates, powders, extracts, or any other product that can be converted into a Sweetened Beverage.
Excise Tax Rate: The tax may apply at the rate of 50% on the Excise Price (i.e., the higher price between the standard price by GTA and the pre-tax retail selling price of Sweetened Beverage).
Applicability: The GTA is working with the Ministry of Commerce and Industry and will soon publish the required amendment in legislation and to declare the implementation date of the excise tax on Sweetened Beverages. The introductory workshop was organised to inform producers and importers and help them proactively plan for the intended implementation of an excise tax on Sweetened Beverages.
Registration as a taxable person: The producers and importers of the products falling under the scope of the planned expansion will be required to register for excise tax.
Product registration: Taxable persons will be required to register excisable products on the Dhareeba portal to ensure smooth customs clearance at the time of import.
Transitional excise tax as Stockpiler: Taxpayers having a stock of SBs on the implementation date will be required to submit a one-time transitional excise tax return and remit the due tax on the opening stock as of the implementation date.
Recommendations for businesses
- Amendment of the current excise tax registration/application of the new excise tax registration: Producers and importers of the products should assess whether their operations qualify them as taxable persons. Once the impact is evaluated, the taxpayers should apply for excise tax registration or amend the current excise tax registration status to reflect the new category of products subject to excise tax.
- Product registration: Taxable persons should identify the products falling under the scope of expansion and register the same in the Dhareeba portal.
- System and other related changes: Taxable persons should update the existing ERP systems to ensure the necessary steps are taken to categorise products covered within the scope extension. The material master for the products needs to be categorized from non-excisable to excisable, the price master needs to be updated to include the excise tax amount, and the accounting entries generated by the ERP need to be suitably configured to include the excise tax to be charged to the customers on the sale or release of the products.
- Training: Businesses and stakeholders must familiarize themselves with the developments and ensure team is equipped to comply with the expanded excise tax scope.
How Deloitte can help
Deloitte holds significant experience in Qatar and across the GCC for various excise tax-related services, such as:
- Assistance in the classification of goods from excise tax perspectives
- Review of Retail Selling Price calculation
- Obtaining clarification if required, from the tax authorities
- Excise ‘health checks’
- Excise tax registrations
- Product registrations
- Warehouse keeper registrations
- Preparation of governance manual
- Tax technology - integrating excise tax into ERP systems
For a detailed analysis or any assistance, please feel free to contact our tax professionals listed below.
Contacts
Our Indirect Tax experts listed below would be happy to discuss the above matters in more detail or support you through a further discussion on your specific requirements.
Middle East Indirect Tax Leader
Michael Camburn
mcamburn@deloitte.com
Qatar Indirect Tax Leader
Michael Towler
mtowler@deloitte.com
Qatar Indirect Tax contacts
Jay Duseja
jduseja@deloitte.com
Majid Majidli
mmajidli@deloitte.com
Vikas Agarwal
vagarwal7@deloitte.com
Muhammad Zohaib
mzohaib@deloitte.com
