Excise Tax in the United Arab Emirates

The UAE is known all over the world for its tax-free environment. While the majority of taxes are not levied within the state, there are still some minor ones. An excise tax is a kind of an indirect tax imposed on certain products. The main purpose of this tax is to decrease the level of consumption of certain goods as they are considered harmful or unhealthy. On the other hand, excise taxes increase the state’s revenues, thus, giving it the opportunity to spend more money on the development of infrastructure and other public services.

An excise tax is levied on the products made or sold in the country. It is imposed on the sales of goods and their production. An excise tax is the important tool of fiscal policy. It gives the essential impetus for the development of the economy which is one of the main aims of the UAE authorities.

Goods being subject to excise tax in the UAE

Here is the list of products an excise tax is imposed on:

• Energy drinks;
• Tobacco and goods related to tobacco;
• Carbonated drinks except for soda water.

The excise tax is paid by the end consumer as it influences the ultimate price of the product. Companies that are engaged in import, production or storing of excisable products should check if they have to be registered at the UAE Federal tax Authority. They have to make sure if they are required to pay an excise tax. In case you need more information on excise tax, please check it on our web site.