What is excise tax in UAE?

Excise tax is an indirect tax on goods harmful to health or the environment like tobacco, energy drinks, and sweetened beverages.

Who needs to register for excise tax?

Importers, producers, stockpilers, and warehouse operators dealing with excisable goods must register.

How do I register for excise tax?

Registration is done through the FTA’s e-Services portal by submitting accurate information and supporting documents.

What are exempted goods under excise tax?

Baby food, beverages with 75% milk, and products used for medical or dietary purposes are exempt.

What are the excise tax rates in UAE?

Rates range from 50% on carbonated and sweetened drinks to 100% on tobacco, energy drinks, and electronic smoking devices.

Excise Tax in UAE MAK Auditing Expert Guide

Introduction to Excise Tax in UAE

Excise tax in UAE is an indirect tax applied to goods that harm human health and the environment. The United Arab Emirates introduced excise tax in 2017 to reduce the consumption of harmful products and promote healthier lifestyles.

Mubarak Al Ketbi (MAK) Auditing helps businesses register, file, and comply with excise tax regulations under UAE Federal Tax Authority (FTA) rules. Every business that imports, produces, or stocks excisable goods must understand its obligations to avoid penalties.

Who Must Register for Excise Tax?

Businesses are required to register for excise tax within 30 days from the start of operations or the effective date of the law. The following categories must register:

Importers of excisable goods into the UAE.
Producers or manufacturers of excise goods.
Businesses that stockpile excise goods.
Overseers or operators of excise warehouses.

Excisable Goods List

Excisable goods include:

Carbonated drinks – aerated beverages except plain water.
Energy drinks – beverages containing caffeine, taurine, guarana, ginseng, or similar stimulants.
Tobacco and related products.
Electronic smoking devices and liquids.
Sweetened drinks.

Excise Tax Registration in UAE

To register for excise tax, businesses must apply through the FTA’s online portal.

Steps for Registration:

Create an e-Services account on the FTA website.
Verify the account with email and password.
Log in and navigate to the excise tax registration form.
Fill in accurate business details and attach documents.
Confirm details and click “Submit for Approval.”

What Goods Are Exempted?

Some goods are exempt from excise tax in UAE. These include:

Milk-based ready-to-drink beverages with at least 75% milk.
Baby food and formula.
Beverages consumed for medical or dietary purposes.

Excise tax is applied in two situations:

Production stage – when harmful goods are manufactured.
Import stage – when excisable goods enter the UAE.

Excise Tax Rates in UAE

The Federal Law defines excise tax rates for each category:

Tobacco and products – 100%
Electronic smoking devices and liquids – 100%
Carbonated drinks – 50%
Energy drinks – 100%
Sweetened drinks – 50%

Methods of Tax Calculation

Ad Valorem – tax based on a percentage of the value of goods.
Specific Tax – fixed amount per unit of goods.

These taxes are often applied to products with high social costs like cigarettes or alcohol, also called “sin taxes.”

Benefits of Excise Tax Compliance

Encourages healthier living standards.
Ensures businesses avoid penalties and fines.
Improves credibility with regulatory authorities.
Protects consumers from harmful goods.
Contributes to UAE’s sustainable economy.

🥇 What Can Help – Mubarak Al Ketbi (MAK) Auditing

Mubarak Al Ketbi (MAK) Auditing provides complete excise tax services in Dubai and across the UAE. From registration to compliance, our experts ensure your business follows FTA regulations and avoids costly penalties.

As the saying goes, “An ounce of prevention is worth a pound of cure,” so working with MAK Auditing saves your business from future risks.