The tax with no threshold
No registration threshold, monthly returns, and a rate that can equal the value of the goods. Excise catches businesses that never considered themselves excise businesses.
Excise tax is the UAE tax most businesses have never heard of until it applies to them — and then it applies with no registration threshold, monthly returns and a rate that can equal or exceed the value of the goods.
What is in scope
| Excise goods | Rate |
|---|---|
| Tobacco and tobacco products | 100% |
| Electronic smoking devices and tools | 100% |
| Liquids used in electronic smoking devices | 100% |
| Energy drinks | 100% |
| Carbonated drinks | 50% |
| Sweetened drinks | 50% historically, with the UAE moving to a tiered volumetric basis by sugar content — confirm the current basis and tier for each product |
Who has to register
There is no registration threshold. Registration is required by anyone who imports excise goods into the UAE, produces them, stockpiles them in the course of business, or releases them from a designated zone. That catches businesses which do not think of themselves as excise businesses at all — a café importing its own energy drinks, a distributor holding stock, a retailer that stockpiles ahead of a rate change.
The obligations
- Monthly returns, due by the 15th day of the following month, with payment by the same date.
- Excise price calculated as the higher of the price published by the Authority for the goods and the designated retail sale price, less the tax included in that price — which is not the same as your cost or your selling price.
- Product registration — excise goods must be registered with the Authority before they can be traded.
- Designated zones — excise goods can be held in a registered designated zone with the tax suspended, but a warehouse keeper must be registered and the stock movement records are demanding.
- Stock records — opening and closing excise stock, production, imports and releases, all reconcilable.
- Digital tax stamps apply to certain tobacco products, with their own tracking obligations.
A business holding excise goods on which tax has not been paid can become liable as a stockpiler — including where it simply bought ahead of an announced rate change. Businesses in the drinks and tobacco supply chain should establish their position before a change is announced, not after, because the liability attaches to stock already held.
We handle registration, product registration, the monthly returns and the stock reconciliation that supports them, alongside your VAT and Corporate Tax compliance.
Reviewed 18 August 2026 by Ahmed Nabil Selim. UAE tax rates, thresholds and deadlines change — confirm the position for your period before relying on it.
Excise tax — frequently asked questions
No. Unlike VAT, excise tax has no revenue threshold — the obligation arises from the activity. Anyone importing, producing or stockpiling excise goods in the course of business, or releasing them from a designated zone, must register regardless of volume or value. A single import of energy drinks for resale can bring a business into the regime.
Monthly, by the 15th day of the month following the tax period, with payment due by the same date. That is a materially tighter cycle than VAT, and it applies every month regardless of whether excise goods moved in the period. Nil returns are still returns.
On the excise price of the goods, which is the higher of the price published by the Federal Tax Authority for those goods and the designated retail sale price, less the excise tax contained in that price. Critically, it is not based on your purchase cost or your actual selling price — a business calculating excise on what it paid will usually get it wrong, and generally in the direction that creates an underpayment.
Yes, and the interaction matters: VAT is calculated on a value that includes the excise tax, so the two compound rather than sitting side by side. On a 100% excise good the VAT is charged on roughly double the pre-excise value, which is why pricing decisions on excise goods need both taxes modelled together rather than added sequentially as an afterthought.
Is this your situation?
Tell us how the business is set up and where things currently stand. We will tell you what is required and what it costs to have it handled properly.
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