Understanding Excise Tax
What is Excise Tax?
Excise Tax is an indirect tax levied on specific goods harmful to health or the environment. Introduced under Federal Decree Law No. 7 of 2017, effective October 1, 2017, with sweetened drinks added in December 2019.
Unlike VAT, there is no registration threshold for excise tax. Any business importing, producing, or stockpiling excise goods must register before commencing activities.
Tax Rates
Excise Tax Rates
Per Cabinet Decision No. 52 of 2019:
| Excise Good | Tax Rate |
|---|---|
| 🚬 Tobacco Products (cigarettes, cigars, etc.) | 100% |
| ⚡ Energy Drinks | 100% |
| 💨 Electronic Smoking Devices & Liquids | 100% |
| 🥤 Carbonated Drinks | 50% |
| 🧃 Sweetened Drinks | 50% |
Exemptions: Unflavored aerated water, drinks with 75%+ milk content, baby food/formula, and beverages for medical purposes.
Who Must Register
Registration Requirements
Importers
Importing excise goods into UAE
Manufacturers
Producing excise goods in UAE
Stockpilers
Stockpiling excise goods for business
Warehouse Keepers
Managing excise warehouses/designated zones
Filing
Return Filing Requirements
| Requirement | Details |
|---|---|
| Filing Frequency | Monthly |
| Due Date | 15th of following month |
| Portal | FTA EmaraTax Portal |
| Product Registration | BrandSync Portal |
Penalties
Non-Compliance Penalties
| Violation | Penalty |
|---|---|
| Late excise registration | AED 10,000 |
| Late payment | 2% + escalating (max 300%) |
| Failure to maintain records | AED 10,000 - 50,000 |