The UAE remains one of the most attractive places to start and grow a business, even after the introduction of...
UAE Excise Tax is an indirect tax levied on specific goods deemed harmful to human health or the environment. Introduced on 1 October 2017 under Federal Decree-Law No. (7) of 2017, it is administered by the Federal Tax Authority (FTA) and applies at the point of production, import, or release from a designated excise zone.
The dual goal of excise duty in the UAE is to generate non-oil government revenue and simultaneously curb consumption of goods that carry significant public health costs, such as tobacco, energy drinks, and sweetened beverages.
At Shuraa Tax, our team of qualified accountants, auditors, and tax advisors in Dubai provides end-to-end support for excise tax registration in the UAE, return filing, compliance management, and advisory services, ensuring your business remains fully compliant.
Excise tax is a consumption-based indirect tax imposed specifically on certain goods considered harmful to public health or the environment. It is also called a selective tax or excise duty in the UAE because it applies only to a defined list of products, not to all goods and services like VAT.
The tax is borne ultimately by the end consumer but is collected at an earlier point in the supply chain - typically at import, production, or release from an excise warehouse. Businesses in the supply chain of excise goods are obligated to register, file returns, and remit the tax to the FTA.
The following categories are subject to excise tax in the UAE, with rates ranging from 50% to 100% of the retail selling price or reference price.
Excise tax rate: 100%
Cigarettes, cigars, pipe tobacco, shisha, and all other tobacco products, including waterpipe tobacco.
Excise tax rate: 100%
Beverages marketed to enhance stamina, concentration, or physical performance, including those with caffeine, taurine, or ginseng.
Excise tax rate: 100%
E-cigarettes, vapes, and personal vaporisers, including all heated tobacco devices and related liquids.
Excise tax rate: 100%
E-liquids and nicotine solutions used in vapes or electronic smoking devices, whether or not they contain nicotine.
Excise tax rate: 50%
Aerated beverages with added sugar or sweeteners, excluding unflavoured sparkling water and diet carbonated drinks.
As of January 2026, beverages with added sugar or sweeteners are taxed based on their sugar density per 100ml:
Exempted Goods: Not all beverages are taxable. Exemptions apply to 100% natural fruit and vegetable juices (with no added sugar), milk and dairy-based drinks (containing at least 75% dairy), baby formula, and medical nutrition products.
Businesses required to pay UAE excise tax must register with the FTA before commencing taxable activity. There is no registration threshold; once you meet the criteria, registration is mandatory.
Register on the FTA's EmaraTax portal with your Emirates ID or passport and trade licence details.
Provide business details, nature of excise activity (importer, producer, warehouse keeper), and the categories of goods involved.
Upload trade licence, passport/Emirates ID, authorisation letter, and proof of business activity. Additional docs may be required for designated zone applications.
Upon FTA approval, receive your unique TRN for excise tax. You can now legally import or produce excise goods and must file monthly returns.
Tobacco products must carry FTA-approved Digital Tax Stamps. Shuraa Tax assists in DTS registration and tracking compliance.
Every registered business must file an excise tax return on the EmaraTax portal on a monthly basis - specifically by the 15th day of the month following the tax period. Returns must be filed even if no taxable activity occurred during the period (nil returns).
The return captures details of excise goods imported, produced, stockpiled, or released from designated zones. The corresponding tax liability must be settled at the time of filing. Late payment attracts an immediate penalty of 2% of the unpaid tax on the day of default, with escalating penalties thereafter.
For businesses handling Digital Tax Stamps (DTS) for tobacco products, additional compliance reports are required alongside the standard excise return.
If a business ceases to deal in excise goods - whether due to business closure, change in product lines, or other reasons, it must apply for excise tax deregistration from the FTA within 30 days of cessation. Failure to deregister when no longer liable can result in continued filing obligations and penalties.
The excise tax deregistration process involves submitting a formal application on EmaraTax, settling all outstanding tax liabilities and penalties, and confirming that all excise goods have been disposed of or accounted for. Shuraa Tax handles the entire deregistration process on your behalf, ensuring a clean and compliant exit.
A Designated Zone (DZ) is a specific geographic area approved by the FTA where excise goods can be stored or moved without the immediate payment of excise tax. These are typically free zones, bonded warehouses, and specific storage facilities. Tax is deferred, not exempted, until the goods leave the designated zone and enter the UAE market.
To operate a Designated Zone, the warehouse keeper must apply for FTA approval, implement approved control systems and IT infrastructure, and furnish a financial guarantee. Movement of goods between designated zones is also subject to specific procedures to maintain accountability.
This mechanism is commonly used by importers and distributors who need to hold stock before final sale, enabling them to manage cash flow more efficiently without upfront tax payment.
As part of ongoing regulatory developments, the UAE government continues to strengthen monitoring and compliance requirements. Key updates in 2026 may include:
Shuraa Tax offers end-to-end excise tax support for businesses in Dubai and across the UAE - from initial registration to ongoing compliance, advisory, and FTA audit defence.
Complete support with excise tax registration in the UAE through the FTA portal. We prepare and review all required documentation to ensure accurate submission and faster approvals.
Our team prepares and files your monthly excise tax returns accurately and on time, ensuring all transactions - imports, production, and stock movements- are correctly reported.
A comprehensive review of your current excise tax position - identifying errors, classification issues, missed obligations, and risk areas before the FTA does.
We handle excise tax deregistration for businesses ceasing excise activities, ensuring all outstanding obligations are resolved and the FTA closes the registration cleanly.
Support in penalty reconsideration requests and compliance rectification. We review penalty notices, identify the root cause, and draft strong reconsideration submissions to the FTA.
We monitor regulatory updates, including 2026 developments in UAE Excise tax, to keep your business aligned with the latest requirements.
Non-compliance with excise tax in the UAE can lead to serious financial penalties. Ensure everything is handled correctly from day one. Reach out to Shuraa Tax today for professional excise tax registration and compliance assistance.
Shuraa Tax provides tailored accounting and taxation services to ensure seamless, compliant, and efficient financial operations for businesses in Dubai.
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A group of experienced and qualified tax agents, accountants, auditors & finance advisors based in Dubai, UAE.
