What is an excise tax?
An excise tax is an indirect tax imposed on the sale of a particular commodity. These goods are taxable if they are imported into the UAE, manufactured in the UAE, or stockpiled in the UAE. 

Excise tax is levied on products that are harmful to people or the environment. The primary purpose of the excise tax is to reduce the consumption of those particular goods to restrict unhealthy practices.

In certain scenarios, goods will be physically labeled to show that the excise tax has already been paid to the government. 

Which products are subject to excise tax?

  • Carbonated drinks: All aerated beverages except for unflavored aerated water. Products used for making aerated beverages, including concentrates, powders, gels, and extracts will also be considered excise goods.
  • Tobacco and tobacco products
  • Energy Drinks: Certain beverages include energizers which provide mental and physical stimulation, such as caffeine, taurine, ginseng, and guarana. Any concentrate, powder, gel, or extract that is made into an energy drink is also subject to excise tax.

Scope of excise tax
A person must register and pay excise tax if they are involved in the following activities:

  • Importing excise products.
  • Producing or manufacturing excise goods.
  • Transferring excise products out of a Designated Zone
  • Stockpiling excise goods in the normal course of business.
  • Selling excise goods in the UAE. The excise tax will be borne by the seller and the tax amount will be included in the total sale price of the excise product.

Excise tax registration
A person who conducts (or intends to conduct) activities like producing, importing, transfering or stockpiling of excise goods should pay excise tax. 

They must register within 30 days after either the onset of business, or the effective date of the law, whichever is earlier. They cannot be a part of any transaction involving excise goods until they have registered for excise tax in the UAE. There is no registration threshold for excise tax.

Exceptions to excise tax registration
A person who does not import excise goods regularly will not have to register for excise tax. They will need to prove that they do not import excise goods more than once in six months or four times in twenty-four months.

Excise tax will still be due on imports where the value of the excise goods exceeds the duty-free threshold.

Excise tax deregistration
If a person who has registered for excise tax is no longer dealing with excise goods, they can apply for deregistration.

Documents required for excise tax registration
You will need to provide several documents during registration to authenticate your information. The supporting documents required are:

  • 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 in which you are registering for excise tax (producer, importer, etc).
  • Details of the excise goods with which the business is involved.
  • Details of your Customs Authority registration, if applicable.
  • If you are registered for excise tax in another GCC State, provide the TRN for that GCC state.