Excise Tax
Excise Tax
Sweetened beverages switched to a tiered volumetric model on 1 January 2026. Companies need to re-evaluate how they classify and price their products. To examine your responsibilities, get in touch with KASA Advisory.
With effect from 1 October 2017, the UAE implemented an excise tax to curb the consumption of goods that are detrimental to both human health and the environment. The import, manufacture, storage, or release of excisable products for consumption within the United Arab Emirates are all subject to this indirect tax.
With a wealth of UAE market expertise, we assist businesses in navigating this regulatory environment, assisting them in maintaining compliance while coordinating tax requirements with more general financial and operational goals.
Excise Tax Scope
Currently, the following products are liable to excise tax:
- 100% tobacco and tobacco products
- Energy drinks: 100%
- Electronic smoking instruments and devices: 100%
- 100% of the liquids used in electronic smoking tools and devices
- Drinks with added sugar are subject to the tiered volumetric excise tax model, which goes into effect on January 1, 2026.
- Drinks with 8 grams or more of total sugar and sweeteners per 100 ml are taxed at AED 1.09 per litre.millilitres
- AED 0.79 per litre for beverages with 5 g or more and less than 8 g of sugar per 100 ml
- Drinks with only artificial sweeteners, or less than 5 grams of sugar per 100 ml, are zero-rated.
- Energy drinks remain taxed at 100% of the excise price and sit outside the sugar tiers altogether.
- Excluded from the definition of sweetened drinks: 100% natural juice with no added sugar or sweetener, drinks containing at least 75% milk, baby formula and follow-on formula, and beverages for special medical or dietary needs.millilitres
- Prior to 31 December 2025, the rate was a fixed 50%.
Importers, manufacturers, stockpilers, and warehouse keepers are among the entities that may be required to register for Excise Tax and adhere to rules issued by the Federal Tax Authority if they are involved in the import, production, stockpiling, or storage of excisable goods.
How KASA Advisory can help
In order to assist organisations in comprehending and managing their obligations with regard to excise tax in the United Arab Emirates, we offer comprehensive support.
- Advice on regulatory requirements and excise tax obligations
- Support for the registration and deregistration of excise taxes
- Assistance in classifying products and determining the appropriate Excise Tax treatment
- Excisable product registration with the appropriate authorities
- Help with Warehouse Keeper registration and other legal requirements
- Assistance with Designated Zone registration and compliance requirements
- Excise tax declaration and return preparation and review
- Examining recurring Excise Tax returns
- Impact analysis and guidance about regulatory modifications
- Assistance with the documentation and submission of natural scarcity claims to the appropriate authorities for excisable commodities kept in tax warehouses
- Support for Federal Tax Authority reconsideration applications and explanation requests
- Assistance in resolving disputes with the Federal Tax Authority and conducting excise tax audits
- Health examinations and compliance reviews for excise taxes
- Advice regarding documentation and record-keeping needs
- Providing training programmes on excise taxes, including customised sessions in line with operational and compliance requirements
Reasons why companies select KASA Advisory
- Excise tax experts with expertise in energy drinks, tobacco, and newly sweetened beverage categories
- Warehouse and Designated Zone Expertise in keeper registration
- Experience with FTA audit support and dispute resolution
- Proactive regulatory updates, such as the reform for sweetened drinks in 2026
Encouraging continued adherence
Our strategy helps organisations manage Excise Tax exposure, maintain compliance, and effectively respond to regulatory developments by fusing practical implementation support with regulatory insight.
Frequently Asked Questions
Browse through frequently asked questions to learn more about our expertise, solutions, and how we help you achieve financial success.
How KASA Advisory can assist
We handle excise registration, product registration, returns and declarations, designated zone and stockpiler compliance, and the MoIAT conformity certificates the new sugar-based model requires. If you import or produce beverages, the classification work is worth doing before an audit finds it.
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