UAE Excise Tax Advisory & Compliance
Simplifying UAE Excise Tax Compliance for Your Business.
Excise Tax in UAE: Corporate Compliance
Compliance with indirect tax law is a key requirement for businesses trading in certain goods in the UAE market. For the companies that deal with these goods, knowing what excise tax in UAE means is just a start. The Federal Tax Authority (FTA) updates rules regularly, and businesses must stay up to date on registration, filing, product classification and reporting.
At Moores Rowland UAE, we make the whole process simple. Our team provides clear, practical and up-to-date advice to help your business remain fully compliant, audit-ready and in line with the latest UAE excise tax regulations. We help you manage every step from registration to monthly filing so you can focus on running your operations without worrying about tax risks.
Why Partner with Professional Excise Tax Consultants in Dubai?
Excise compliance requires knowledge of customs codes, tariff classification and the latest FTA updates. One small mistake in classification can prevent you from importing or trigger unwanted FTA assessments.
That’s why excise tax consultants in Dubai, like Moores Rowland, can work alongside you as an extension of your tax team. We verify, review and qualify returns to ensure the proper classification, and protect your supply chain from potential risks.
What is Excise Tax in UAE?
Excise tax is an indirect tax imposed on certain goods that can harm health or the environment. In 2017, the UAE implemented this tax via Federal Decree-Law No. 7 of 2017. The main goals are to encourage healthier options, and to help pay for public services.
The tax is levied once, usually when goods are imported, manufactured, or released into the local market from a designated zone. Unlike VAT, which is levied at every level of sale, excise tax is levied only once.
It applies across the whole of the UAE, including free zones when goods are moved for local consumption.
Main excise goods include:
- Tobacco products (cigarettes, cigars, etc.)
- Energy drinks
- Carbonated drinks (aerated beverages, excluding plain sparkling water)
- Sweetened drinks and products with added sugar or sweeteners
- Electronic smoking devices and their liquids
Products Exempt from Excise Tax
Certain goods are excluded under executive regulations to support health and essential needs:
- Ready-to-drink beverages that contain at least 75% animal milk or that meet the standards for a qualifying milk substitute.
- Certified baby foods, certified formula, certified follow-on formula, and foods for special medical purposes.
- Beverages that are mixed and served in open containers for immediate consumption in restaurants.
- Juices that are 100% natural fruit or vegetable, with no added sweeteners or sugars.
Understanding Excise Goods and Tax Rates in UAE
Tax obligations in the FTA are specified based on the particular product. Rates are applied to the Excise Price which is normally the higher of the FTA standard price or the Retail Sales Price (excluding VAT). Here is a breakdown of the current excise tax rates in the UAE by law:
Excise Goods | Excise Tax Rate | Legal Application |
Tobacco and its products | 100% | All tobacco items and related products. |
Liquid used in electronic smoking devices and tools | 100% | All liquids, refills, and cartridges used in electronic smoking devices. |
Electronic smoking devices and tools | 100% | All e-cigarettes, vapes, and similar devices. |
Carbonated drinks | 50% | All aerated beverages except unflavoured sparkling water. |
Energy drinks | 100% | Drinks marketed as energy boosters containing stimulants. |
Sweetened drinks | 50% | Drinks with added sugar or sweeteners. |
Important Note on Classification: If a product fits more than one category (e.g., a carbonated sweetened drink), it follows the rules of the applicable category with the highest impact under current law for uniform compliance.
Who Must Register for Excise Tax in the UAE?
There is no minimum turnover threshold for excise tax registration UAE.
Excisable goods: The goods that attract the excise duty. Any business that imports, creates, stockpiles or processes these goods, must comply with FTA regulations and register.
According to the UAE Federal Decree Law No. 7 of 2017 on Excise Tax, and the Cabinet Resolution Concerning the Executive Regulations of Federal Decree-Law on the Excise Tax, registering for excise tax is the responsibility of any business engaged in:
- The import of excise goods into the UAE
- The manufacturing of excise goods where the goods are released for consumption in the UAE
- The stockpiling of excise goods in the UAE in some situations
- Anyone who is responsible for overseeing an excise warehouse or designated zone, i.e., a warehouse keeper.
FTA has the right to perform audits on taxable corporates and, following their assessment, may take punitive actions against those that have not complied with the law.
Our excise tax professionals are with you every step of the way to provide you with accurate and dependable advice, however, it is the business that is liable to meet any requirement to comply with excise tax, as imposed by the FTA.
The 30-Day Registration Rule: You need to register via the EmaraTax portal within 30 days of commencing the activity above or acquiring the stock. Failure to do this results in a penalty of AED 10,000.
Requirements for Monthly Excise Tax Return Filing UAE
Once you are registered and you have entered into a monthly reporting cycle.
- File your return: file and pay the balance of your excise return within the 15th day of next month.
- Pay: with EmaraTax portal and the related Payment Reference Number (PRN).
- Keep Records: keep detailed records (lab certificates, import documents, inventory logs) for a minimum of 5 years for audit purposes.
Excise Tax Calculation Methods in UAE
Excise tax is usually calculated on an ad valorem basis (percentage of the “excise price”) or using specific or tiered-volumetric methods, depending on the product.
1. Ad Valorem (most common for tobacco, energy drinks, etc.)
- Excise tax = Excise price × tax rate e.g. 50% or 100%
- Excise price = Higher of:
- FTA-published standard price (if any), or
- Designated (recommended) retail selling price (excluding VAT and excise tax).
- For imports: The excise price cannot be lower than CIF value (Cost, Insurance & Freight) + customs duty
Example:
- Energy drink (100% rate): Recommended retail price AED 10 (excl. taxes) → Excise tax AED 10. Final pre-VAT price AED 20.
- Sweetened/soft drink (pre-2026 50% rate): Recommended retail price AED 5 (excl. taxes) → Excise tax AED 2.50. Total pre-VAT = AED 7.50.
For 100% rate items, the tax effectively doubles the base excise price (i.e. before VAT is applied).
2. Tiered-Volumetric (effective 1 January 2026) for sweetened drinks
Tax is based on volume (litres) and total sugar/sweetener content (grams per 100ml of the finished drink), not on retail price.
Rates (effective 2026):
- < 5g sugar per 100ml or only artificial sweeteners: AED 0 per litre
- 5g to < 8g sugar per 100ml: AED 0.79 per litre (medium tier)
- ≥ 8g sugar per 100ml: AED 1.09 per litre (high tier)
Example:
- 1.5 litre bottle with 10g sugar/100ml (high tier): Tax = 1.5 × AED 1.09 = AED 1.635.
For concentrates/syrups without dilution instructions: Use FTA conversion formulas (e.g., total sugar in grams × 20 to estimate equivalent finished drink volume).
3. Specific Rate Method
Fixed amount per unit (applied to certain tobacco products, e.g., per cigarette or per pack in some cases, alongside or instead of ad valorem).
Steps to Calculate Excise Tax in UAE
- Determine whether the goods are excisable – refer to class lists of FTA or lab tests if necessary.
- Decide the base (excise price, volume+ sugar content, CIF for imports, or other)
- Use the proper method and rate. Total liability = tax per unit x quantity (for the period of the tax)
- Use deductions if appropriate (Exports, use of goods in manufacture of other excisable goods)
- File the return and make payment on the FTA portal (monthly unless otherwise specified; due on the 15th of the next month)
Businesses (importers, producers, and stockpilers) dealing with excisable goods must register with the FTA.
Our tax-qualified experts manage every excise tax step with precision. We help your business stay fully compliant, avoid penalties, and maintain clean FTA-ready records.
Managing Errors and FTA Excise Tax Voluntary Disclosure UAE
Even the most careful bookkeepers commit errors on monthly forms. If your business identify an underreported tax balance or a mistake in an old return, you need to remedy it quickly by filing an excise tax voluntary disclosure UAE form on the portal.
Filing a voluntary disclosure before the FTA announces a formal tax audit allows your business to manage past mistakes at a much lower penalty rate. However, waiting for an audit to discover the mistake exposes your company to hefty, compounding penalties.
Our excise tax consultant can help you review your old books, catch mistakes, and file the correct disclosures to keep your financial penalties at a minimum.
How Moores Rowland Tax Consultation Supports Your Excise Tax Compliance
Moores Rowland provides full support to local and international companies.
Our service include:
- Registration & Deregistration: we complete registrations to avoid sanctions, and deregister after a business has slowed or ceased.
- Monthly Return: we calculate your total sales, your production and imports, and submit returns on time and accurately.
- Product Classification: we review your ingredients and laboratory data in relation to the FTA rules to confirm whether your product falls under the proper rate or sugar tier.
- Deductions & Refund Claims: we compile documentation to support your claim for a refund on goods which have been exported or destroyed properly.
- Audits & Penalties Disputes:we assist you in your audit, support your submission of responses and assist with your request for reconsideration.
- We speak plain language and make it simple and practical to understand complex regulations.
Secure Corporate Tax Compliance with Moores Rowland
Strong tax compliance ensures profits and operations run smoothly. We combine strong local knowledge with a simple approach. We take out the worry of complicated regulations so you can concentrate on expanding your business.
Contact our experienced tax professionals at Moores Rowland today. Let us help you optimize your excise tax strategy and ensure full compliance with confidence.
Frequently Asked Questions (FAQs)
Q1. Do companies in free zones need to register for excise tax?
Yes. They should register. Even though excise tax is suspended in designated zones, it is payable when the goods enter into the mainland market.
Q2. What Are the Rules for Natural Shortage of Excise Goods?
If you can provide strong evidence (stock reports, surveyors’ statements, etc.), FTA accepts natural loss in storage/transport seriously and doesn’t charge excise levied for inevitable shortages.
Q3. Can a business deregister for excise tax?
Yes. Apply to deregister within 30 days after the cessation of relevant activities, or face a penalty.