Excise Tax Rates (2026)
Base Price
AED 100
Excise Tax (100%)
AED 100
VAT (5%)
AED 10
Final Price
AED 210
Understanding UAE excise tax
What is excise tax?
Excise tax is a form of indirect tax levied on specific goods that are considered harmful to human health or the environment. In the UAE, it was introduced on 1 October 2017 through Federal Decree-Law No. 7 of 2017. The tax is applied at the point of production, import, or release from a designated zone, and is ultimately borne by the end consumer through higher retail prices.
What products are taxed?
Excise tax applies to: tobacco and tobacco products (100%), energy drinks (100%), electronic smoking devices and liquids (100%), and sweetened/carbonated beverages (tiered volumetric model from 2026). Sweetened drinks include any beverage with added sugar, sweeteners, or flavoring. Exemptions include baby formula, medical drinks, drinks with 75%+ milk content, and 100% natural fruit or vegetable juices with no added sugar.
How is excise tax calculated?
For tobacco, energy drinks, and vaping products, excise tax is a percentage of the retail selling price. For sweetened and carbonated beverages, the UAE introduced a tiered volumetric model from 1 January 2026: low sugar (≤5g/100ml) pays AED 0/L, moderate sugar (>5g–≤8g/100ml) pays AED 0.79/L, and high sugar (>8g/100ml) pays AED 1.09/L. Products without an approved sugar conformity certificate are taxed at the highest tier. VAT at 5% is then charged on the excise-inclusive price.
FTA-Aligned: Excise tax rates are based on UAE Federal Tax Authority regulations for 2026, including the tiered volumetric model for sweetened beverages. Businesses dealing in excise goods must register with the FTA.
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Disclaimer: This calculator provides estimates based on current UAE Federal Tax Authority rates and MOHRE labour law provisions. It does not constitute professional tax, financial, or legal advice. Your actual entitlements may differ depending on your individual circumstances, employment contract, and applicable free zone regulations. Always consult a qualified adviser before making financial decisions. Read our terms