UAE Excise Tax applies to specified goods, including tobacco,
electronic smoking products, energy drinks and sweetened drinks.
Compliance depends on the product and the business’s role in the supply
chain. In 2026, businesses must consider the new beverage tiers, minimum
excise prices and revised administrative penalties.
This guide is for importers, producers, distributors and warehouse
operators assessing their obligations. A product’s sale in a shop does
not, by itself, establish which party must register or account for
Excise Tax.
Current UAE Excise Tax rates
| Product | Rate or amount |
|---|---|
| Tobacco and tobacco products within scope | 100% of excise price |
| Electronic smoking devices and tools within scope | 100% of excise price |
| Liquids for electronic smoking devices, with or without nicotine |
100% of excise price |
| Energy drinks | 100% of excise price |
| Sweetened drinks: at least 5g but under 8g sugar/other sweeteners per 100ml |
AED 0.79/litre |
| Sweetened drinks: at least 8g per 100ml | AED 1.09/litre |
| Sweetened drinks: below 5g per 100ml; relevant artificial-sweetener categories |
AED 0/litre |
The sweetened-drink amounts apply from 1 January 2026 under Cabinet
Decision 197/2025. Energy drinks retain their separate treatment.
Classify the product before applying a sugar-content tier.
Sugar content, exclusions
and evidence
For drinks within scope, consider the prescribed treatment of
naturally occurring sugar as well as added sugar and other sweeteners.
For concentrates, powders and similar products, assess the prepared
drink under the applicable instructions.
Certain products are excluded from the sweetened-drink definition,
including qualifying milk/milk-substitute products and specified
nutritional or medical products. An excluded product and an in-scope
product carrying AED 0 are different classifications.
Importers and producers should obtain the required conformity
certification and accepted laboratory evidence. Without that evidence,
the highest sugar classification can apply pending proof. The FTA’s
conformity-certificate notice explains the requirement.
Minimum excise prices
from September 2026
Cabinet Decision 137/2026 introduces or replaces minimum excise-price
rules from 1 September 2026:
| Product | Minimum excise price |
|---|---|
| Cigarettes within the decision | AED 0.40 per cigarette |
| Water-pipe, ready-to-use tobacco and relevant similar products | AED 0.10 per gram |
| Liquids used in electronic smoking devices and tools | AED 1 per ml |
These are minimum excise prices, not new standalone
tax rates. Apply the statutory valuation method and the relevant floor.
Cabinet
Decision 137/2026.
Simple beverage example
Assume a properly classified sweetened drink contains 6g of relevant
sugar/sweeteners per 100ml and 2,000 litres become taxable. At AED
0.79/litre, the Excise Tax is AED 1,580, before any separately justified
deductions or adjustments.
Excise and VAT are different taxes. Do not assume that a 100% excise
rate means doubling a VAT-inclusive retail price or that every reseller
can claim an Excise credit like input VAT.
Who must register?
Importing, producing and specified stockpiling activities can create
registration obligations. Warehouse keepers require their own applicable
registration. There is no general turnover threshold equivalent to the
VAT registration threshold.
The rules address the date an intention to undertake excisable
activity arises and contain specific exceptions, including certain
irregular-import circumstances. Plan registration before trading and
determine the legal deadline for the actual activity; do not rely on a
general statement that every retailer or every occasional importer must
register.
Use the FTA
Taxable Persons Guide for Excise Tax, January 2026 and the current
registration service.
Product registration
is a separate control
Taxpayer registration does not complete product compliance. Maintain
a product file for each SKU containing:
- product description, size, ingredients and classification;
- applicable customs/product identifiers;
- sugar-content evidence and conformity certificate where
required; - relevant excise price or volumetric rate;
- registration/update confirmations;
- effective dates and the evidence supporting changes.
Follow the current EmaraTax/BrandSync route linked from the FTA
Excise goods-registration service. A zero tax amount should not be
treated as automatic permission to skip classification or registration
checks.
Monthly returns and payment
Excise returns are generally monthly, with filing and payment
ordinarily due by the 15th of the following month, subject to the
applicable deadline rules.
A practical monthly control sequence is:
- Complete the applicable declarations for imports, production,
releases and other activities. - Reconcile quantities against opening stock, goods movements, customs
records and closing stock. - Check product rates, price floors and declaration dates.
- Support each deduction, export, destruction or shortage treatment
under its specific conditions. - Review the populated return, submit, arrange payment and retain both
confirmations.
The FTA explains the declaration-based return process in its filing
and payment guidance. Exports, shortages and destruction require the
appropriate Excise treatment and evidence; they are not simply VAT-style
“zero-rated sales.”
Digital Tax Stamps and
designated zones
The FTA’s Digital Tax Stamp scheme identifies tobacco categories
including cigarettes, water-pipe tobacco and electrically heated
cigarettes. Do not assume that every vaping device or liquid falls under
the same marking rules merely because it is excisable. Check the exact
product and current marking decision. FTA
stamp guidance.
Excise designated-zone treatment also requires the applicable
FTA registration and warehouse-keeper arrangements. A
customs warehouse or free-zone address alone is insufficient. Check zone
status, movement controls, guarantees and renewal dates. FTA
designated-zone registration service.
Administrative
penalties: use the current schedule
Changes under Cabinet Decision 129/2025 took effect on 14 April 2026.
Relevant examples include:
- AED 10,000 for failure to submit a registration application within
the prescribed time; - AED 10,000 for the specified record-keeping violation, increasing to
AED 20,000 for the specified repeat violation within 24 months; - late payment calculated at 14% per annum, applied monthly for each
month or part as prescribed.
Understatement, disclosure, late returns and zone failures have
separate provisions. Calculate each penalty from the relevant breach and
date rather than applying a blanket percentage. Consolidated
Cabinet Decision 40/2017 and amendments.
Frequently asked questions
Are
carbonated drinks still automatically taxed at 50%?
No. Apply the current product categories. A sweetened carbonated
drink may fall under the volumetric tiers, while an unsweetened product
needs a separate scope assessment.
Does AED 0/litre
mean no compliance obligations?
Not automatically. Classification, product evidence and the
business’s registration position still require review.
Must every retailer
register for Excise Tax?
No. Assess what the business actually imports, produces, holds or
releases and whether the tax has been correctly accounted for
upstream.
Can exported
or destroyed stock simply be deducted?
Only where the relevant conditions, procedures and evidence support
the treatment. Retain the approvals and movement records required for
the case.
How BPOAS can help
BPOAS can review accounting, stock and customs reconciliations and
help organise an Excise compliance file, with specialist classification
or regulatory support where needed.
Request an Excise Tax
compliance review. For related obligations, see our UAE VAT guide and Accounting
and Tax Compliance Hub.
General guidance based on sources checked on 15 October 2026.
Product classification and the transaction facts determine the
treatment; verify changes affecting your goods before filing.