The UAE levies excise tax on specific health-damaging goods. Here is a complete guide to UAE excise tax in 2025.
UAE Excise Tax Overview
UAE excise tax was introduced in 2017 and is administered by the Federal Tax Authority (FTA). Excise tax applies to: Tobacco and tobacco products: 100% (cigarettes, cigars, shisha tobacco, e-cigarettes, and similar products). Energy drinks: 100% (beverages with stimulants like caffeine, taurine, guarana, marketed as energy drinks). Carbonated beverages (excluding water): 50% (all fizzy drinks including diet drinks and sparkling water with flavour). Electronic smoking devices and tools: 100% (vaping devices). Liquids used in electronic smoking devices: 100% (e-liquids, vape juice, regardless of nicotine content). Sweetened beverages: 50% (added in 2020 – beverages with added sugar or other sweeteners including fruit juices, flavoured water, sports drinks, and concentrates).
UAE Excise Tax Registration
Who must register for UAE excise tax: importers of excisable goods (pay excise on import), domestic producers of excisable goods, warehouse keepers of designated excise zones (pay excise on release from the warehouse). Registration: via EmaraTax (FTA portal). Timeline: must register before importing or producing excisable goods. Late registration: subject to penalty. Monthly return: excise tax returns are filed monthly (unlike quarterly VAT returns).
Excise Tax in Free Zones (Designated Zones)
UAE free zones can apply to be Designated Zones for excise purposes. Within a Designated Zone: excise tax is suspended (not collected) on goods held in the zone. Excise becomes due when goods are released from the Designated Zone into the UAE market. Purpose: allows bonded warehousing of tobacco and energy drinks for re-export without paying UAE excise tax (common in JAFZA and other trade-focused free zones).