Excise Tax Services in UAE

Excise tax in the UAE is an indirect tax imposed on specific goods deemed harmful to health or the environment. Businesses that import, produce, or store excisable goods — such as tobacco, energy drinks, carbonated beverages, electronic smoking devices, and sweetened drinks — are required to register with the Federal Tax Authority (FTA) and pay excise tax. It was introduced in October 2017 under Federal Decree-Law No. 7 of 2017.

The UAE applies the following excise tax rates: 100% on tobacco products and electronic smoking devices; 100% on energy drinks; 50% on carbonated drinks (excluding unflavoured sparkling water); and 50% on sweetened beverages. These rates are applied to the higher of the retail selling price or the FTA-designated standard price.

To register for excise tax in the UAE, you must submit an application through the Federal Tax Authority (FTA) online portal. You will need to provide details about your business activities, types of excisable goods, and your role (importer, producer, warehouse keeper, or stockpiler). NR Doshi & Partners helps businesses complete this process accurately and efficiently.

Businesses that fail to register, file returns on time, or pay excise tax correctly face FTA penalties. These can include fixed penalties for late registration, percentage-based penalties on unpaid tax amounts, and potential suspension of business activities. Voluntary disclosure before an audit can help reduce penalties. NR Doshi & Partners assists businesses in managing compliance risks and resolving FTA issues.

Yes. Free zone companies in the UAE that import, produce, or release excisable goods from designated zones are subject to excise tax. However, goods stored in an FTA-approved designated zone and not released for consumption may be exempt. Businesses in JAFZA, SAIF Zone, RAK Free Zone, and other free zones should seek professional advice to determine their specific obligations.

VAT (Value Added Tax) in the UAE applies broadly to most goods and services at a standard rate of 5%, collected at each stage of the supply chain. Excise tax, by contrast, applies to a narrow category of specific harmful products at much higher rates (50%–100%) and is typically charged once — at the point of import or production. Businesses dealing in both VAT and excise-taxable products must manage both obligations separately.

NR Doshi & Partners provides end-to-end transfer pricing services including policy design, documentation preparation (Master File, Local File, CbCR), benchmarking studies, FTA audit support, and ongoing compliance reviews. With over 40 years of experience in UAE tax and accounting, our team delivers practical, regulatory-compliant solutions for businesses across Dubai, Abu Dhabi, Sharjah, and major UAE free zones.

Transfer pricing documentation should be reviewed and updated annually to reflect changes in business operations, transaction volumes, pricing policies, and regulatory requirements. The UAE FTA expects documentation to be current at the time of filing. NR Doshi & Partners provides annual TP review services to ensure your documentation remains compliant.