Everything you need to know about the excise tax in the UAE
The UAE government has officially rolled out a revised excise tax framework effective from January 2026. The UAE excise tax in 2026 reforms included a Tiered Volumetric Method, aiming to push manufacturers towards healthier product formulations to support a sustainable future for the nation. All these changes have got many people and businesses asking how they are gonna affect them. MyBayut is here to answer all your questions to help you safely navigate the excise tax in the UAE.
FAQs about the New UAE EXCISE TAX LAW
What is the UAE excise tax list?
Excise tax is a form of indirect tax imposed by the Federal Tax Authority (FTA) on goods considered injurious to human health and the environment. The UAE excise tax list covers a wide range of products, including tobacco, electronic smoking devices and their components, energy drinks and sweetened beverages. The UAE government has imposed the tax to discourage the consumption of “sin goods” while generating revenue for public services
Which products are subject to excise tax in the UAE?
The list of products subject to excise tax in the UAE as of January 2026 is:
- Tobacco and Tobacco products (traditional and heated)
- Electronic smoking devices, aka e-cigrates and vapes
- Liquids and gels used in electronic smoking devices
- Energy drinks
- Sweetened beverages
How much is excise tax in the UAE?
The excise tax rates in the UAE are calculated using two methods (flat and tiered) depending on the product category.
A flat 100% excise tax applies to tobacco, tobacco-containing products, electronic smoking devices and their components. The same rate is also applicable to drinks marketed as energy drinks. However, the excise tax on beverages in the UAE follows a tiered model based on the sugar content, which is given below:
Sugar Level (Per 100ml) | Excise Tax Rate (Per Litre) |
|---|---|
Sugar Level (Per 100ml) Low Sugar (Less than 5g) | Excise Tax Rate (Per Litre) AED 0 |
Sugar Level (Per 100ml) Moderate Sugar (5g to less than 8g) | Excise Tax Rate (Per Litre) AED 0.79 |
Sugar Level (Per 100ml) High Sugar (8g or more) | Excise Tax Rate (Per Litre) AED 1.09 |
Please note that the sugar level is the sum of natural sugar, added sugar and other sweeteners. Drinks with only artificial sweeteners will also have AED 0 tax on them.
When will the tiered excise tax on sweetened drinks take effect in the UAE?
The tiered excise tax in the UAE is effective from January 1, 2026.
Are energy drinks taxed in the UAE?
Yes, energy drinks are subject to a flat 100% excise tax in the UAE regardless of their sugar content. Unlike other beverages, they are not part of the tiered sweetened drinks excise in the UAE.
Are carbonated drinks subject to excise tax in the UAE?
The new UAE Federal Tax Authority excise framework has abolished the category for carbonated beverages. However, they are subjected to the Tiered Volumetric Method tax, ranging from AED 0.79 to AED 1.09, depending on their sugar content.
Meanwhile, a 0% excise tax applies to diet and zero-sugar sodas if they contain only artificial sweeteners.
Are tobacco products included in the UAE excise tax list?
Yes, a flat 100% excise tax on tobacco in the UAE remains in effect. In fact, the 2026 reformed regulations specifically included electrically heated tobacco products alongside cigarettes, cigars and shisha tobacco.
Are electronic smoking devices and liquids taxed in the UAE?
Yes, there are strict electronic smoking device excise laws in the UAE with a flat 100% tax on the hardware as well as liquid regardless of nicotine presence.
How do I register for excise tax in the UAE?
It is imperative for businesses to avoid excise tax penalties. The FTA excise tax registration and compliance in the UAE can be done through EmaraTax. The process is as follows:
- Stockpilers or anyone dealing in excise goods must register within 30 days. Failure to register on time will result in a late registration penalty of AED 10,000.
- Those dealing with sweetened beverages must submit Ministry of Industry and Advanced Technology (MOIAT)-accredited lab reports.
- Tobacco and shisha must carry digital tax stamps to be sold legally.
What are the excise tax exemptions in the UAE?
While the government has tightened its regulations, several products are subject to excise tax exemptions in the UAE, such as:
- Ready-to-drink beverages with at least 75% milk or milk substitute
- 100% natural fruit and vegetable juices with no added sugars
- Baby formula and food
- Beverages for special dietary needs and medical purposes with certifications
I have more questions. Who can I contact?
For any further clarification or inquiries about registering for excise tax in the UAE, visit the official FTA website – it has detailed guides on the new excise tax law and how you can register as a business. You can also contact the FTA through the following channels:
- Call on 800-82923
- Email to info@tax.gov.ae
- Enquiry form on the FTA website
This wraps up our guide on the revised UAE excise tax rules for 2026. We hope the provided information answers the questions you had. We’ve got many more articles regarding taxes, including VAT exemption on real estate transactions. We also have a comprehensive guide on different taxes in the UAE. If you are planning to open a business in the UAE, read our guide on VAT registration in the UAE.
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