What Excise Tax Covers in the UAE
The UAE introduced excise tax in 2017, an indirect tax built around a specific policy goal: diversify government revenue while discouraging consumption of goods considered harmful to human health or the environment. The tax applies to defined categories of goods — electronic smoking devices, tobacco products, carbonated and energy drinks, the liquids used in electronic smoking devices, and products containing added sugar or other sweeteners.
The framework’s executive regulation, set out in Cabinet Decision No. 37 of 2017, was significantly amended by Cabinet Decision No. 108 of 2023, effective from 1 December 2023. That amendment addressed several practical challenges businesses had encountered under the original rules, sharpening the definition of excise goods, tightening registration and deregistration procedures, clarifying obligations for importing, producing, and releasing excise goods, and refining the penalty framework for non-compliance. A further amendment, Cabinet Decision No. 198 of 2025, effective 1 January 2026, updated the registration provisions specifically — the filing and payment mechanics described in this guide remain governed by the 2023 amendment.
Excise Tax Rates in the UAE
Rates vary by product category:
- 50% on carbonated drinks
- 100% on tobacco products
- 100% on energy drinks
- 100% on electronic smoking devices
- 100% on liquids used in electronic smoking devices
- 50% on sweeteners and other sugar added to any product
The tax is charged at the point a business imports or produces excise goods, or when those goods are released from a designated zone or excise warehouse into the UAE market. Any business engaged in these activities must register for excise tax and remit what it owes through the FTA’s EmaraTax portal.
Need Expert Advice?
Contact the team at Farahat & Co. for professional support and expert insights for businesses operating in the UAE.
How to File and Pay Excise Tax Online — Step by Step
Filing and paying excise tax follows a consistent sequence through EmaraTax.
Step 1 — Log In Securely
Access the EmaraTax portal using an existing FTA account or UAE Pass credentials for authenticated, secure access.
Step 2 — Confirm Business Details
Ensure the business profile on file — activities, registration details, and related information — is complete and current before proceeding to the return itself.
Step 3 — Navigate to the Excise Tax Section
Within the excise tax section, review the declarations relevant to the current tax period. EmaraTax pre-populates much of this based on previous form submissions, covering import, production, release, or deductible excise tax declarations from earlier periods.
Step 4 — Declare and Confirm
Declare the excise tax position for the period accurately, then confirm the calculated amount of tax due before moving to payment.
Step 5 — Make Payment
Select a payment method through the portal’s available options and complete payment. The excise tax payment process follows broadly the same mechanics as VAT payment within EmaraTax, so businesses already familiar with VAT payments will find the process largely consistent.
Excise Tax Filing and Payment Deadlines
Excise tax returns and the corresponding payment are due 15 days after the end of the relevant tax period, which typically aligns with a calendar month. A tax period covering January, for example, requires the return and payment to be completed by 15 February.
Where this 15-day deadline falls on a weekend or a UAE public holiday, it shifts automatically to the next working day — a convenience that exists for the deadline itself, though businesses are still better served preparing well ahead of it rather than relying on the extension as a buffer.
Claiming Excise Tax Refunds
The FTA provides for refunds of excess excise tax paid by businesses, subject to specific conditions. A refund claim is submitted through EmaraTax, accompanied by the relevant supporting documents and evidence. The FTA reviews the claim and issues a decision within 20 business days of submission.
One development worth flagging for any business holding older excise tax credit balances: Federal Decree-Law No. 17 of 2025, effective 1 January 2026, introduced a firm five-year limitation period on claiming tax refunds and credit balances, applying across VAT, Corporate Tax, and Excise Tax alike. A credit balance now needs to be claimed within five years of the end of the period in which it arose, or the right to that refund lapses entirely. Transitional relief allows businesses whose five-year window had already expired before 1 January 2026, or was due to expire within a year of that date, to submit outstanding claims up to 31 December 2026. A business carrying an excise tax credit from several years ago should treat reviewing that balance as a near-term priority rather than something to revisit later.
Accessing FTA Support and Guidance
The FTA publishes a range of guides, references, and public clarifications to help businesses understand their excise tax obligations and the procedures attached to them. An e-learning platform, supporting materials, and interactive video tutorials are also available, aimed at helping both businesses and the wider public understand how excise tax operates in practice. Excise tax remains one of the UAE government’s core initiatives for strengthening fiscal sustainability while encouraging healthier, more environmentally conscious consumption patterns among both consumers and businesses.
Who Must Register Before Filing Excise Tax
Filing only becomes relevant once a business is registered, and excise tax registration carries no minimum threshold — unlike VAT or Corporate Tax, where a revenue figure determines whether registration is mandatory. Any business engaged in importing excise goods, producing excise goods for release into the UAE market, stockpiling excise goods under the specific circumstances the law defines as stockpiling, or managing a warehouse or designated zone as a warehouse keeper must register before beginning that activity. A business that starts producing or importing excise goods without first registering is already out of compliance from its very first transaction, which makes registration timing a genuinely different risk profile compared to VAT, where a grace period tied to a revenue threshold gives a growing business some runway before registration becomes mandatory.
Ongoing Obligations Beyond the Monthly Return
Filing the monthly return is the most visible recurring obligation, but it sits alongside several others that registered businesses need to maintain continuously rather than revisit only at filing time. Warehouse keepers carry specific responsibilities around the goods held in their designated zones or warehouses, including accurate record-keeping of stock movements and ensuring excise tax is properly accounted for at the point goods are released for consumption. All registered businesses must retain supporting records — import and production documentation, stock records, and evidence underlying each period’s declaration — for the standard retention period the FTA applies across its tax regimes, available on demand if the FTA requests them during a review. Businesses should also keep their EmaraTax registration details current, reporting any material change in business activity, ownership, or registered information promptly rather than allowing the FTA’s records to fall out of step with the business’s actual current position.
Common Mistakes to Avoid When Filing Excise Tax
- Treating the 15-day deadline casually — this window is considerably tighter than VAT’s 28-day rule, and businesses used to VAT timelines sometimes underestimate how quickly the excise tax deadline arrives
- Letting old credit balances sit unclaimed — under the current five-year limitation rule, an unclaimed credit can lapse permanently if it isn’t actively claimed in time
- Assuming pre-populated EmaraTax declarations are automatically correct — figures carried forward from previous submissions should still be reviewed against current-period records before confirming
- Missing the connection between import, production, and release activities — businesses involved in more than one of these activities need to ensure each is correctly reflected in the relevant declaration, rather than assuming one captures them all
- Submitting refund claims without complete supporting documentation — incomplete evidence is a common reason refund decisions are delayed beyond the standard 20 business day review period
Frequently Asked Questions (FAQs)
What is the deadline for filing and paying excise tax in the UAE?
Excise tax returns and payment are due 15 days after the end of the relevant tax period, typically a calendar month. If the deadline falls on a weekend or public holiday, it automatically shifts to the next working day.
How do I file and pay excise tax in the UAE?
Excise tax is filed and paid through the FTA’s EmaraTax portal. The process involves logging in, confirming business details, reviewing pre-populated declarations in the excise tax section, declaring and confirming the tax due, and completing payment through one of the portal’s available payment methods.
What goods are subject to excise tax in the UAE?
Excise tax applies to carbonated drinks (50%), tobacco products (100%), energy drinks (100%), electronic smoking devices (100%), liquids used in electronic smoking devices (100%), and products containing added sweeteners or sugar (50%).
How long does it take to receive an excise tax refund in the UAE?
The FTA reviews excise tax refund claims and issues a decision within 20 business days of submission through EmaraTax, provided the claim includes complete supporting documentation and evidence.
Is there a time limit for claiming excise tax refunds or credit balances?
Yes. Under Federal Decree-Law No. 17 of 2025, effective 1 January 2026, excise tax credit balances must be claimed within five years of the end of the period in which they arose. Transitional relief allows businesses with balances close to or past that window to submit claims up to 31 December 2026.
At what point is excise tax actually charged?
Excise tax is charged when excise goods are imported or produced, or when they are released from a designated zone or excise warehouse into the UAE market.
What happens if the excise tax filing deadline falls on a public holiday?
The deadline automatically shifts to the next working day. This adjustment applies to the filing deadline itself but should not be relied upon as a routine buffer for preparing the return.
Need Expert Advice?
Contact the team at Farahat & Co. for professional support and expert insights for businesses operating in the UAE.
How Farahat & Co. Can Help
Excise tax carries a notably tighter filing window than VAT, and the consequences of a missed deadline or an unclaimed credit balance compound quickly under the current limitation rules. Farahat & Co. supports businesses across the UAE with excise tax registration, return filing, refund claims, and broader compliance with the current Excise Tax Decree-Law and its executive regulation.
Contact Farahat & Co. today to discuss your excise tax filing and payment requirements.
