Filed on May 24, 2017 | Last updated on May 24, 2017 at 06.48 am

The announcement came following the first meeting of the board of the UAE Federal Tax Authority in Dubai.

The UAE's Federal Tax Authority has announced a 100 per cent tax on tobacco products and energy drinks, as well as a 50 per cent tax on carbonated beverages, beginning in the fourth quarter of this year.

The announcement came following the first meeting of the board of the UAE Federal Tax Authority in Dubai, which was presided over by Sheikh Hamdan bin Rashid Al Maktoum, Deputy Ruler of Dubai and Minister of Finance. The valued added tax (VAT) will be imposed on imported goods and services unless an explicit text in the law stipulates a zero per cent or exemption from paying the VAT, including foods, commercial buildings and hotel services. According to the law, an imported commodity or service could be subject to VAT by five per cent or exemption from the tax.

Businesses that deal in international transportation, health and education services, commodities and exports and investment gold are exempted from taxes, as are residential buildings for sale or lease during the initial three years in which a building is finished, as well as certain financial services.

All businesses that import any commodity or services must register for the tax if their total imports - that are subject to VAT - exceed the obligatory registration limit, which is Dh375,000.

Registration is optional for businesses with an annual income of Dh187,500 or more.

However, 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.

VAT will come into force from January 1, 2018.

The Federal Tax Authority will open the registration door to businesses, whose tax subjected imports exceed the obligatory registration limit, in the first quarter of 2017.

Additionally, during the board meeting Obaid bin Humaid Al Tayer, Minister of State for Financial Affairs, was named as chairman of the FTA board.

reporters@khaleejtimes.com