All About Excise Tax in the UAE

Introduced across the UAE on 1 October 2017, the Excise tax is an indirect tax that is levied on goods that are deemed to be harmful to human health or the environment. Any business which produces, imports, or stockpiles excise goods, or releases them from a designated zone in the UAE, should register for excise tax. Once your business has registered for excise tax, you are required to file your excise tax return by the 15th day following the end of each tax period.

The purpose of levying excise tax was to reduce the consumption of unhealthy and harmful commodities while also raising the revenue for the government to spend on beneficial public services.

Goods to which this tax applies are:

From 1 December 2019, excise tax was also levied on :

  • 100 % on electronic smoking devices and tools.
  • 100% on liquids used in such devices and tools.
  • 50% on sweetened drinks.

Excise tax registration

Businesses can register for excise tax on the e-services sections on the FTA Website. You need to create an account and sign in. After which you need to fill up the registration form online and submit it.

Documents required for registration

You will need to attach certain documents during registration to authenticate your information. Make sure you have the following documents with you:

  • Passport copy
  • Emirates ID
  • Trade license
  • Any other official records that entitle the business to administer activities within the UAE.

Business details required for registration

  • The role (Producers or Importer) in which you are registering for excise tax.
  • Details of the excise goods in which the business deals with.
  • Details of your Customs Authority registration (only if applicable).
  • If you are registered for excise tax in another GCC State, kindly provide TRN for that state.

Guides to help you understand better

  • If you are a producer of excise goods in the UAE, there are specific declarations you are required to make based on your business activities. Here are few relevant scenarios described for you to better understand your reporting requirements. View File
  • If you are an importer of excise goods, there are specific declarations you are required to make based on your registration status and business activities. Here are the common scenarios to help you understand your reporting requirements. View File

Digital Tax Stamp to track and trace excisable products

To enhance the excise tax regime in the UAE, the Federal Tax Authority (FTA) announced the adoption of a new design for ‘Digital Tax Stamps’ to be placed on the packaging of cigarettes, electrically heated cigarettes, and waterpipe tobacco circulated in local markets. This newly introduced control scheme requires tobacco manufacturers and stakeholders to comply with enhanced standards for the importation and trading of tobacco in the UAE.

Providing a valuable recognition feature, the tax stamps help the public identify that the sold products are genuine. This in turn enables the government to authenticate, validate and trace excisable products from manufacturer to retailer with valuable data. The DTS is a proven digital solution to protect Government tax revenues and trace excisable products throughout the complete supply chain.

Violations related to excise tax

FTA has the power to conduct audits and inspections any time and if any violation are found they will impose penal measures on those who do not comply with the law.

ViolationAdministrative penalty
Failure by the taxable person/business to display prices inclusive of tax. AED 15,000
Failure to comply with conditions and procedures related to the transfer of excise goods in designated zones. AED 50,000 or 50% of the tax, if any unpaid on the goods as the result of the violation
Failure by the taxable person to provide the authority with price lists for the excise goods they produce, import or sell. AED 50,000 for the first time, AED 20,000 in case of repetition within 24 months

Would you like to know more about excise tax filing, and other procedures?

Our team of proficient tax consultants can offer advice to ensure timely compliance. They can assist you on matters related to Corporate Tax, VAT and Excise Tax for your business in one-go. Kindly contact our tax experts today.