UAE Excise Tax

Excise Tax was introduced across the UAE in 2017. Excise tax is a form of indirect tax levied on specific goods which are typically harmful to human health or the environment. These goods are referred to as “excise goods”.

Complete UAE Excise Tax List

Federal Tax Authority (FTA) has issued a complete list of excise tax in UAE along with the standard excise tax rate on all the excise goods. The goods that will be charged under excise tax in UAE will be:

Carbonated Drinks

This include any aerated beverage except for unflavoured aerated water. Also considered to be carbonated drinks are any concentrations, powder, gel, or extracts intended to be made into an aerated beverage.. Carbonated drinks are subject to 50% excise tax in UAE. Unflavoured aerated water is exempted.

Tobacco and Tobacco products

Federal Tax Authority (FTA) has levied 100% excise tax on all kinds of tobacco products. These products include:

• Cigarettes
• Cigarette rag
• Chewing tobacco
• Cigars
• Cigarillo
• Hand rolling tobacco
• Expanded tobacco
• Herbal smoking products
• Reconstituted tobacco sheets
• Snuff

Energy drinks

Include any beverages which are marketed, or sold as an energy drink, and containing stimulant substances that provide mental and physical stimulation, which includes without limitation: caffeine, taurine, ginseng and guarana. This also includes any substance that has an identical or similar effect as the aforementioned substances. Also considered to be energy drinks are any concentrations, powder, gel or extracts intended to be made into an energy enhancing drink.Substances that have similar effects as the ones mentioned above and any concentrations, powder, gel or extracts intended to be made into an energy enhancing drink will also be levied with 100% excise tax.

Electronic smoking devices and tools

Electronic smoking devices and tools shall include all electronic smoking devices and tools and the like, whether or not containing nicotine or tobacco.All liquid used in electronic smoking devices and tools used in such devices even if they contain nicotine or not will be levied 100% excise tax.

Sweetened Drinks

According to a statement released by the UAE Cabinet General Secretariat, Excise Tax will apply on additional goods in support to the UAE Government’s efforts to promote healthier consumption and prevent chronic diseases linked to the consumption of specific products. Accordingly, the tax will apply as follows: An Excise Tax of 50% will be levied on any product with added sugar or other sweeteners, whether in the form of a beverage or a concentrate, powder, extract or any product that may be converted into a beverage. Any ready-to-drink beverages that contain added sugar or added sweetener; Any concentrates, powders, gels or extracts intended to be made into an ‘Sugar Sweetened Beverages (SSB)’and will be levied 50% excise tax.

• For the purposes of the SSB definition for Excise Tax purposes, “sugar” includes any type of sugar determined under Standard 148 of the GCC Standardisation Organisation (“GSO”). Examples of sugar include White Sugar – Sucrose, Dextrose, Fructose, Glucose syrup and Lactose, among others.
• • On the other hand, “sweetener” includes any type of sweeteners as determined under Standard 995 of the GSO. Such sweeteners include, but are not limited to Aspartame, Sucralose, Acesulfame Potassium, Saccharin and Steviol Glycosides.

Sweetened drinks that are excluded from Excise Tax

• Ready to drink beverages that contain at least 75% milk or its substitutes
• Baby formula, follow up formula or baby food
• Handling of Foods for Special Medical Purposes
• Beverages consumed for special dietary needs
• Beverages consumed for medical use

Excise Tax Rates

• 50 per cent on carbonated drinks
• 100 per cent on tobacco products
• 100 per cent on energy drinks
• 100 per cent on electronic smoking devices
• 100 per cent on liquids used in such devices and tools
• 100 per cent on liquids used in such devices and tools