Excise Tax was introduced in the UAE with effect from 1 October 2017 to reduce the consumption of products harmful to human health and the environment. It is an indirect tax applied to the import, production, stockpiling, or release of excisable goods for consumption within the UAE.

With more than 55 years of experience in the UAE market, BDO supports organisations in navigating this regulatory landscape, helping them maintain compliance while aligning tax obligations with broader financial and operational objectives.

Scope of Excise tax

The following goods are currently subject to Excise Tax:

• Tobacco and tobacco products – 100%
• Energy drinks – 100%
• Electronic smoking devices and tools – 100%
• Liquids used in electronic smoking devices and tools – 100%
• Sweetened drinks – subject to the tiered volumetric Excise Tax model effective 1 January 2026:
  • Drinks containing ≥ 8 g of sugar per 100 ml – AED 1.09 per litre
  • Drinks containing 5–7.9 g of sugar per 100 ml – AED 0.79 per litre
  • Drinks containing < 5 g of sugar per 100 ml or only artificial sweeteners – zero-rated
  • Previously subject to a flat 50% rate until 31 December 2025

Entities involved in the import, production, stockpiling, or storage of excisable goods — including importers, manufacturers, stockpilers, and warehouse keepers — may be required to register for Excise Tax and comply with regulations issued by the Federal Tax Authority.

How BDO in the UAE can assist

BDO provides comprehensive support to help organisations understand and manage Excise Tax obligations in the UAE.

• Advisory on Excise Tax obligations and regulatory requirements
• Assistance with Excise Tax registration and deregistration
• Support with product classification and determination of applicable Excise Tax treatment
• Registration of excisable products with relevant authorities
• Assistance with Warehouse Keeper registration and related compliance requirements
• Support with Designated Zone registration and compliance obligations
• Preparation and review of Excise Tax declarations and returns
• Review of periodic Excise Tax filings
• Impact assessment and advisory relating to regulatory changes
• Support in managing natural shortage claims for excisable goods stored in tax warehouses, including documentation and submission to relevant authorities
• Assistance with clarification requests and reconsideration applications to the Federal Tax Authority
• Support during Excise Tax audits and dispute resolution with the Federal Tax Authority
• Excise Tax health checks and compliance reviews
• Guidance on record-keeping and documentation requirements
• Delivery of Excise Tax training programmes, including tailored sessions aligned with operational and compliance requirements

Why businesses choose BDO in the UAE

• Excise Tax specialists – experience across tobacco, energy drinks, and new sweetened beverage categories
• Designated Zone and Warehouse Keeper registration expertise
• FTA audit support and dispute resolution experience
• Proactive regulatory updates – including the 2026 sweetened drinks reform

Supporting ongoing compliance

Our approach combines regulatory insight with practical implementation support, helping organisations manage Excise Tax exposure, maintain compliance, and respond effectively to regulatory developments.