Configuring Products and Services as Excise Products

Some products in the UAE are subject to Excise Tax, such as tobacco products, soft drinks, and energy drinks. The system enables you to classify these products as excise products so the system automatically controls the available tax options when creating invoices and transactions.
This guide explains how to classify a product as an excise product and how this classification affects taxes and sales transactions.

Before using this feature, make sure the following requirements are met:

• The account country must be set to United Arab Emirates.
• The UAE E-Invoicing application must be activated for the classification field to appear.
• Excise Tax must be configured in tax settings and linked to the Excise (T) code in UAE E-Invoicing settings.

Classifying a Product as an Excise Product

1. From the main menu, go to “Inventory“.
2. Select “Products & Services“.
3. Open the required product or click “Add New Product“.
4. In the additional product information section at the bottom of the page, locate the “Is Excised Product” checkbox.
5. Make sure the selected tax for the product is an Excise Tax.
6. The Is Excised Product field only appears when the UAE E-Invoicing application is activated.
7. Click on the “Save“.

Effect of Excise Product Classification on Available Taxes

Classifying a product as an excise product affects the list of available taxes in all transactions.

If the Product Is Classified as an Excise Product

• Only excise taxes will appear in the tax list.
• VAT and any non-excise taxes will not appear.

If the Product Is Not Classified as an Excise Product

• Only non-excise taxes will appear in the tax list.
• Excise taxes will not appear.

Validation Rules When Saving

The system validates the product classification against the selected tax when saving:

• If the product is classified as an excise product and a non-excise tax is selected, the following message will appear:

  “An excise tax must be selected for an excise product.”

• If the product is not classified as an excise product and an excise tax is selected, the following message will appear:

  “Excise tax cannot be selected for a non-excise product.”

Existing products in the system are not classified automatically. Each product must be updated manually if it needs to be classified as an excise product.

Effect of Classification on Invoices, Returns, and Debit Notes

When adding an excise product to any sales transaction:

• The tax is filled automatically based on the product settings.
• The tax cannot be changed to a non-excise tax. If you try to select a non-excise tax, the following message will appear:
  “This tax cannot be selected because the selected product is subject to Excise Tax.”
• The document cannot be saved if any line contains a tax that does not match the product classification.