Overview

Excise tax in the United Arab Emirates (UAE) is a tax imposed on specific goods that are considered harmful to human health or the environment. Implemented on October 1, 2017, it’s part of the UAE government’s efforts to reduce consumption of unhealthy products and increase non-oil revenues.

Key Information

Taxable Products and Rates

• Carbonated drinks: 50%
• Energy drinks: 100%
• Tobacco products: 100%
• Sweetened drinks: 50% (added December 1, 2019)
• Electronic smoking devices and tools: 100% (added December 1, 2019)
• Liquids used in electronic smoking devices: 100% (added December 1, 2019)

Important Points

1. Registration: Businesses involved in importing, manufacturing, or stockpiling excise goods must register for excise tax.
2. Declaration and Payment:
   • Monthly declaration required
   • Payment due within 15 days of the end of the calendar month
3. Penalties:
   • Late registration: AED 20,000
   • Failure to submit return: AED 1,000 for first offense
   • Late payment: 5% if unpaid for 1 month, additional 2% per month

Exemptions

• Goods sold at airports to outbound travelers
• Special diplomatic exemptions

Implementation Impact

• Revenue generation for the government
• Reduced consumption of harmful products
• Alignment with World Health Organization recommendations

Compliance Requirements

1. Maintain detailed records
2. Issue proper tax invoices
3. File regular returns
4. Ensure accurate stock declarations

Responsible Authority

Federal Tax Authority (FTA) of the UAE