UAE brought in Excise Tax in 2017. The idea was simple — make harmful products more expensive so people buy less of them, and use that revenue for public health programs.
If your business imports, makes, or stores excise goods, this tax applies to you. The FTA is strict about it.
What Is Excise Tax
It is a tax on goods that harm health or the environment. The business pays it to the FTA, but the price goes up for the customer at the end.
Why does this tax exist:
- To make people think twice before buying harmful products
- To push consumers toward better choices
- To bring in money for health and environmental programs
What Is Taxed
These are taxed at 100%:
- Tobacco and tobacco products
- Vapes, e-cigarettes and the liquids used in them
- Energy drinks
These are taxed at 50%:
- Fizzy drinks — plain sparkling water does not count
- Sweetened drinks
These are not taxed at all:
- Baby food and formula
- Drinks that are 75% milk or more
- Drinks prescribed for medical reasons
- Dietary supplements with proper approval
Who Has to Register
No revenue threshold here. It comes down to what your business actually does.
You must register if you:
- Bring excise goods into the UAE
- Make excise goods and sell them locally
- Store excise goods beyond the allowed limit
- Manage a warehouse that holds excise goods
What if you only import occasionally?
You might be exempt if you import less than once every six months, or less than four times over two years. Do not just assume this applies to you — check it properly.
How to Register
Go to the FTA’s EmaraTax portal, fill in the application and upload your business documents.
The FTA usually takes up to 20 working days to process it.
What You Have to Do Every Month
Once you are registered, monthly filing is not optional:
- File your return by the 15th of each month
- Fill in the Excise Declaration and Deductible Tax Forms properly
- Keep records of your stock, production figures and product prices
- Keep import documents ready for clearance
Mistakes in your filing are not just a penalty risk. They can also stop you from claiming refunds later.
Penalties
| Violation | Penalty |
| Did not register | AED 10,000 |
| Filed late, first time | AED 1,000 |
| Filed late again | AED 2,000 |
| Wrong product value | AED 5,000 |
| Bad or missing records | AED 10,000 to AED 20,000 |
Record-keeping penalties are the ones that catch businesses out most often. Gaps in documentation are hard to explain after the fact.
Things to Keep in Mind
Document everything across your supply chain From the moment goods arrive or get produced, through to when they leave — keep records at every stage.
Warehouse operators have extra obligations Running an excise warehouse comes with rules beyond standard compliance. The FTA has specific requirements for warehouse keepers.
Cross-border shipments need proper paperwork Missing documents on imports or exports cause clearance problems and can trigger penalties fast.
Found an error in a past return? File a voluntary disclosure with the FTA. Coming forward yourself usually leads to a better outcome than waiting for the FTA to find it during an audit.
Common Questions
Does my revenue affect whether I need to register? No. There is no minimum threshold. It is about what your business does, not how much it earns.
Who ends up paying excise tax? The business pays it when goods are imported, produced, or released from a warehouse. That cost usually ends up in the price the customer pays.
Can the tax be reclaimed? In some situations, yes. Exported goods or goods where tax was already paid before may qualify. The FTA guidelines cover the exact conditions.
I missed the filing deadline. What now? AED 1,000 penalty for the first time. AED 2,000 if it happens again after that.