Excise tax in UAE

The UAE has started levying excise tax for e-cigarettes, e-liquids and sweetened drinks, with effect from December 1st, 2019. The initiative aims to reduce the consumption of harmful products, thus putting a control on the diseases that arise by using these items.
According to the Cabinet General Secretariat “The decision comes to support the UAE government’s efforts to enhance public health and prevent chronic diseases directly linked to sugar and tobacco consumption.”

New Products that will be levied excise tax

Electronic smoking devices and tools- 100 %
Sweetened drinks- 50 %

This is in addition to the 50 per cent tax on carbonated drinks, 100 percent on tobacco products and 100 percent on energy drinks.

Sweetened drinks that are excluded from Excise Tax

Ready to drink beverages that has at least 75% milk or its substitutes
Baby formula, follow up formula or baby food
Drinks used for medical purposes
Special dietary needs drinks
Beverages that contain alcohol as an ingredient

Any business that imports excise goods to UAE; is involved in the production of excise goods that are released for consumption in the country; stockpiles excise goods in the UAE; and anyone who is in charge of managing an excise warehouse or designated zone, must register for excise tax.

One must register for excise tax within the specified time period, otherwise it can result in fines and various other issues.