Excise & Other Taxes in the UAE

Excise and customs duties are essential components of the UAE’s indirect taxation framework. While excise tax aims to discourage the consumption of harmful products, customs duties serve to regulate imports and support domestic industries. For businesses operating in or with the UAE, understanding these tax obligations is critical to ensure compliance, minimize risks, and benefit from available exemptions and refunds.

Excise Tax Services

Excise tax in the UAE is levied on specific goods deemed harmful to human health or the environment. These include tobacco products, energy and soft drinks, sweetened beverages, electronic smoking devices, and the liquids used within them. Introduced in 2017, excise tax is administered by the Federal Tax Authority (FTA) and is applied at the point of importation, production, or release from designated zones.

Our excise tax services cover:

• Excise tax registration with the FTA
• Assessment of excise tax applicability based on product classification
• Filing and payment of excise tax returns via the FTA portal
• Calculation of excise tax on imports, production, and stock movements
• Support in preparing excise declarations and submitting reports
• Representation in FTA audits and compliance reviews
• Advisory on exemptions, designated zones, and destruction approvals

The excise tax rates in the UAE are:

• Tobacco products: 100%
• Energy drinks: 100%
• Sweetened drinks: 50%
• Soft drinks: 50%
• Electronic smoking devices and liquids: 100%

Businesses engaged in the import, production, or stockholding of excise goods are required to register and comply with monthly filing obligations. Failure to comply may result in substantial administrative penalties, including AED 15,000 for incorrect pricing or up to 50% of unpaid tax for procedural violations.

We assist clients in evaluating their exposure to excise tax, planning compliant operations, and recovering overpaid amounts when applicable. Our advisors also guide businesses through the complexities of designated zone reporting and relief claims for wastage, shortage, or destruction of goods under FTA supervision.

Customs Duties & Tax Compliance

Customs duties in the UAE apply to imported goods and are managed by the respective customs departments in each emirate. The standard customs duty is 5% of the CIF (cost, insurance, and freight) value, but rates may vary — for example, 50% on alcohol and 100% on tobacco products. Customs duties help protect local industries and regulate the inflow of restricted and controlled goods.

Our customs tax compliance services include:

• Customs registration and obtaining a Client Customs Code
• Classification of goods using HS/HTS codes for accurate duty calculation
• Preparation and submission of import/export and transit declarations
• Advice on exemptions for diplomatic, military, charitable, and industrial shipments
• Assistance with warehouse licensing and bonded storage under customs supervision
• Consultancy on duty drawback and import duty recovery
• Documentation support for re-exported goods to claim duty refunds

In specific scenarios, businesses can reclaim customs duty through:

• Duty drawback for goods re-exported without domestic use
• Deposit refund on exported items with proper exit documentation
• Industrial exemptions for local manufacturers with proof of origin
• Use of bonded warehouses for deferred duty payment, supported by guarantees

We also help companies navigate customs inspection procedures, whether internal (at the port) or external (at the business site). Our consultants provide complete support in resolving customs violations, avoiding fines, and ensuring smooth movement of goods.

Common penalties for non-compliance include:

• Incorrect HS code declaration: AED 500
• Late document submission: AED 50
• Incorrect declaration: AED 500
• Non-re-export of free zone goods: 10% of CIF value

Our team ensures your goods are correctly classified, your documentation is compliant, and any applicable exemptions or refunds are secured. We also guide clients through the customs audit process and assist with appeals in case of disputes.