UAE Excise Tax, introduced under Federal Decree-Law No. 7 of 2017, applies at significant rates, 100% on tobacco products and energy drinks, 50% on carbonated and sweetened beverages, to businesses that import, produce or stockpile excisable goods in the UAE. The regime operates differently from VAT: there is no threshold for registration, the point of tax is typically at the point of import or production rather than sale, and the inventory declaration and deductible tax mechanisms require careful management.
CashLaw Global's excise tax practice covers registration, monthly return preparation and filing, deductible tax calculations, inventory reconciliations and FTA audit support for UAE businesses subject to the excise tax regime. We also advise businesses on the excise tax implications of their supply chain decisions, including the tax impact of stockpiling, the treatment of goods released for export, and the excise tax consequences of product reformulation.
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Book Free ConsultationExcise Tax targets goods that are harmful to human health or the environment. The current rates are 100% on tobacco products, electronic smoking devices, and energy drinks, and 50% on carbonated beverages, sweetened beverages, and electronic smoking liquids.
Any entity engaged in the import of excise goods into the UAE, the production of excise goods within the local market, the release of excise goods from a designated zone, or the stockpiling of excess excise goods for business use must complete mandatory Excise Tax registration.
A Designated Zone is a strictly fenced, socio-economically isolated area approved by the FTA where Excise Tax is suspended while goods remain within its physical boundaries. The applicable tax is only triggered and payable when the goods cross the border into the local UAE mainland market.