In 2017, the UAE introduced an excise tax, which is an indirect tax imposed on specific goods that are generally harmful to human health or the environment. These goods are known as “excise goods.” The following definitions help determine whether a product falls under the category of excise goods:
- Carbonated drinks encompass all aerated beverages, except unflavoured aerated water. This category also includes any concentrates, powder, gel, or extracts designed to be made into an aerated beverage.
- Energy drinks consist of beverages marketed or sold as energy drinks, containing stimulant substances like caffeine, taurine, ginseng, and guarana, which provide mental and physical stimulation. This also includes any substances with similar effects. Energy drinks also encompass concentrates, powder, gel, or extracts intended to create an energy-enhancing drink.
- Tobacco and tobacco products include all items listed in Schedule 24 of the GCC Common Customs Tariff.
- From 1st December 2019, the excise tax was expanded to include:
- Electronic smoking devices and tools.
- Liquids used in electronic smoking devices and tools.
- Sweetened drinks.
The rate of excise tax, according to Cabinet Decision No. 52 of 2019 on Excise Goods, Excise Tax Rates, and the Methods of Calculating the Excise Price, is as follows:
- 50 per cent on carbonated drinks
- 100 per cent on tobacco products
- 100 per cent on energy drinks
- 100 per cent on electronic smoking devices
- 100 per cent on liquids used in electronic smoking devices and tools
- 50 per cent on any product with added sugar or other sweeteners.