Comprehensive Overview of Excise Tax Regulations

Excise taxes are commonly imposed by governments around the world, and the UAE is no exception. In line with its commitment to public health, the UAE government introduced excise taxes on products considered harmful to individual and societal well-being. The tax is currently applicable to carbonated drinks, energy drinks, tobacco and tobacco-related products. Since 1st December 2019, the scope of excise tax has expanded to include electronic smoking devices, e-liquids, and sweetened beverages.

Purpose of Excise Tax Implementation

The primary goal of excise taxation in the UAE is to reduce the consumption of products that negatively impact health and the environment. Excessive intake of sugar and tobacco is linked to chronic diseases such as diabetes, obesity, and cancer. Additionally, products like tobacco contribute to environmental degradation.

Besides health and ecological concerns, excise tax also supports government revenue generation. The expansion of excise tax to additional products significantly impacts businesses that manufacture, import, or trade in these goods, creating new compliance requirements.

Products Covered Under UAE Excise Tax (from 1 December 2019)

1. Sweetened and Carbonated Beverages – 50% Tax

Products that contain added sugar or sweeteners in any form fall under this category. This includes ready-to-drink beverages as well as concentrates, powders, extracts, and gels used to make such drinks. Common sweeteners include:

• Sorbitol

• Aspartame

• Neotame

• Saccharin

• Glucose syrup, white sugar, soft brown sugar, etc.

2. Electronic Smoking Devices and Tools – 100% Tax

This includes all e-smoking devices (whether they contain tobacco/nicotine or not), along with e-liquids used in vaping devices.

Other Excise Tax Categories

• Energy Drinks: Containing stimulants like caffeine, taurine, ginseng, or guarana

• Tobacco & Tobacco Products: Includes cigars, chewing tobacco, herbal smoking products, and rolling tobacco

Exempt Products

The following products are not subject to excise tax:

• Unflavored aerated water

• Beverages with at least 75% milk

• Baby formula and baby food

• Beverages containing alcohol

• Medical-use nutritional food products

Who Needs to Register for Excise Tax in the UAE?

According to Federal Decree-Law No. 7 on Excise Tax, the following entities must complete excise tax registration in the UAE:

• Producers of excise goods

• Importers of excise goods

• Warehouse keepers

• Stockpilers of excise goods

• Entities releasing excise goods from designated zones

Failure to register on time can lead to penalties, fines, and legal consequences.

How Calculate Capitals Can Help

Calculate Capitals offers end-to-end Excise Tax services across the UAE, supporting businesses in ensuring timely registration and regulatory compliance. Our services include:

• Excise tax registration and de-registration

• Product classification and listing for registration

• Stock and inventory assessment with duty calculations

• Advisory services for stockpile evaluation

• Filing excise duty returns and ongoing compliance

• Updates and consultancy on the latest FTA amendments

Need expert guidance? Calculate Capitals is your trusted partner for all excise tax-related services in the UAE. Get in touch today for personalized support and full regulatory compliance.