Excise Tax Services
Registered Tax Agent Regulated by the FTA (Federal Tax Authority)
Excise Tax Services in the UAE
Registration, Compliance, and Advisory for UAE Excise Tax Obligations
Excise Tax is an indirect tax imposed on specific goods considered harmful to human health or the environment, including tobacco products, electronic smoking devices, energy drinks, carbonated beverages, and sweetened drinks.
Our excise tax services cover:
- FTA registration and TRN issuance
- Monthly return filing and compliance
- Product classification and rate determination
- Penalty review and audit support
Farahat & Co. is a registered FTA tax agent providing complete excise tax services for businesses across the UAE.
What is Excise Tax in the UAE?
Excise Tax is a federal indirect tax levied on the production, import, or release from a designated zone of specific goods considered harmful to health or the environment. The tax was introduced in October 2017 under Federal Decree-Law No. 7 of 2017 on Excise Tax.
Key characteristics of Excise Tax:
- Purpose
The tax serves a dual objective: discouraging consumption of harmful products and generating public revenue for the government. - Point of Application
Unlike VAT, excise tax is applied at the stage of production or importation, not directly on the end consumer at the point of sale. - Legal Basis
The Federal Excise Tax Law defines the excise goods covered, applicable rates, exemptions, and the compliance requirements businesses must follow throughout the supply chain.
Who Must Register for Excise Tax?
Excise tax registration applies to any business involved in the production, import, storage, or distribution of excise goods in the UAE.
Entities required to register with the FTA include:
- Producers and Manufacturers
Businesses producing goods such as tobacco products, energy drinks, or sweetened beverages. - Importers
Businesses bringing excise goods into the UAE from abroad. - Stockpilers
Businesses holding excise goods in commercial trade quantities, beyond what can be justified for personal use. - Warehouse Keepers, Distributors, and Retailers
Entities handling excise goods at any stage of the supply chain, including storage and final distribution.
If your business deals in tobacco, e-cigarettes, energy drinks, or carbonated beverages, you are very likely required to register for excise tax before commencing these activities.
Excise Tax Registration Process
Excise tax registration is completed through the FTA’s EmaraTax portal, following a structured sequence.
- Step 1: Determine Your Obligation
Confirm whether your business activities involve the production, importation, or storage of excise goods in the UAE. - Step 2: Gather Required Documents
Prepare your trade licence, Certificate of Incorporation, Emirates ID, passport copy of the authorised signatory, and customs number where applicable. - Step 3: Create an EmaraTax Account
Register your business on the FTA’s official EmaraTax platform. - Step 4: Submit the Application
Log in to your account, complete the registration form, upload the required documents, and submit your application for FTA review. - Step 5: Receive Approval
Once approved, your business is officially registered for excise tax in the UAE.
Documents Required for Excise Tax Registration
A complete and accurate document set helps avoid delays during FTA review.
Standard documents required:
- Trade licence and Certificate of Incorporation
- Tax Registration Number (TRN) or VAT TRN, if already issued
- Customs number, for businesses involved in importing
- Passport and Emirates ID of the authorised signatory
- Articles of Association or Partnership Agreement
- Bank account details for tax payments
- Supporting documents relevant to your specific business activity
After registration is approved:
A Tax Registration Number is issued, confirming your business is officially recognised by the FTA for excise tax purposes. Registered businesses must then submit monthly returns, pay taxes on time, and maintain detailed records to remain compliant and ready for any FTA review or audit.
Excise Tax Rates and Calculation Method
Excise tax is calculated by applying the relevant rate to the retail selling price, import value, or production cost, whichever is higher.
Current Excise Tax Rates:
| Product Category | Rate |
|---|---|
| Tobacco and Tobacco Products | 100% |
| Electronic Smoking Devices and Tools | 100% |
| E-liquids Used in Vapes | 100% |
| Energy Drinks | 100% |
| Carbonated Drinks | 50% |
| Sugar-Sweetened Drinks | 50% |
Worked Example:
A company imports an energy drink with an import value of AED 10 per can. At a 100% rate, the excise tax equals AED 10 per can. The post-tax retail price therefore becomes AED 20.
The FTA also applies a tiered volumetric model for certain products, where tax is calculated based on quantity or sugar content rather than value alone.
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Penalties for Excise Tax Non-Compliance
Non-compliance with UAE excise tax law can result in significant financial and legal consequences.
Key penalties include:
Registration Failures
- Failure to register when required: AED 10,000
- Failure to deregister when required: AED 1,000 per month, up to AED 10,000
Late Payment
- 2% of unpaid tax immediately after the due date
- 4% monthly thereafter, up to a maximum of 300% of the unpaid tax
Filing and Record-Keeping
- Late return filing: fixed administrative penalties plus applicable interest
- Failure to maintain or provide records: AED 10,000 for a first offence, AED 20,000 for repeat offences
Other Violations
- Digital Tax Stamp violations: fines up to AED 50,000 plus 50% of unpaid excise tax
- Price declaration non-compliance: fines starting from AED 5,000
- Tax evasion or deliberate misreporting: audit, goods seizure, licence suspension, and potential criminal prosecution
Professional representation significantly reduces the risk of these penalties through accurate, timely compliance.
Designated Zones and Why Registration Matters
Certain Designated Zones in the UAE may qualify for excise tax exemptions, depending on the nature of the business and the storage facility involved. Companies operating within these zones must still maintain detailed records demonstrating compliance with FTA requirements.
Why timely registration matters:
- Avoid Fines
Prevent the financial losses associated with non-compliance or late registration. - Build Compliance Credibility
Establish a transparent, legally sound business structure that partners and clients can trust. - Protect Your Business Licence
Many UAE licensing authorities review excise tax registration status during renewals. - Strengthen Supply Chain Management
Registered businesses handle excise goods more efficiently and in full compliance with the law. - Meet Federal Obligations
Ensure all excise tax duties are met under UAE federal law, avoiding regulatory disruption to your operations.
Frequently Asked Questions
What is Excise Tax in the UAE and which goods are subject to it?
Excise Tax is an indirect tax imposed on goods considered harmful to health or the environment, including tobacco products, electronic smoking devices and liquids, energy drinks, carbonated beverages, and sweetened drinks. Rates range from 50% to 100% depending on the product category.
Who is required to register for Excise Tax in the UAE?
Businesses that produce, import, stockpile, or handle excise goods through warehousing, distribution, or retail must register with the FTA. This applies regardless of business size if the activity involves excisable products.
What documents are needed for Excise Tax registration?
Required documents include a trade licence, Certificate of Incorporation, Emirates ID and passport of the authorised signatory, customs number where applicable, Articles of Association, and bank account details for tax payments.
How can a business register for Excise Tax in the UAE?
Registration is completed through the FTA’s EmaraTax portal. Businesses create an account, confirm their taxable obligation, upload supporting documents, and submit the application for FTA review and approval.
What is a Tax Registration Number and when is it issued?
A Tax Registration Number is a unique identifier issued by the FTA once an excise tax registration application is approved. It must be referenced in all subsequent filings and correspondence with the authority.
Are there any exemptions or special zones for Excise Tax in the UAE?
Yes. Businesses operating in approved Designated Zones may qualify for excise tax exemptions under specific FTA conditions. These businesses must still maintain detailed compliance records for goods stored or moved within the zone.
How does a business stay compliant after Excise Tax registration?
Ongoing compliance requires filing monthly returns, paying any tax due on time, maintaining accurate records of all excise goods, and ensuring proper documentation throughout the supply chain.
What are the penalties for failing to register for Excise Tax?
Failure to register when required results in a fixed penalty of AED 10,000. Additional penalties apply for late filing, late payment, and inadequate record keeping, with amounts increasing for repeat violations.
Can Farahat & Co. assist with Excise Tax registration and compliance?
Yes. Farahat & Co. is a registered FTA tax agent providing full excise tax services including registration, classification, monthly filing, designated zone advisory, and penalty review. Contact us to get your business registered correctly.