UAE: Excise tax on tobacco, energy/carbonated drinks | KPMG | GLOBAL
Share with your friends

UAE: Excise tax on tobacco, energy and carbonated drinks

UAE: Excise tax on tobacco, energy/carbonated drinks

Under new provisions in the United Arab Emirates, an excise tax is to be imposed on goods considered harmful to human health and the environment, and on luxury goods. While each Gulf Cooperative Council (GCC) country can individually decide the tax rates and which goods are taxable, the rate of excise tax has been capped at 100% of the value of the goods.


Related content

A draft excise tax law was approved by the Federal National Council in March 2017 with the final excise tax law expected to be published before 30 June 2017. Proposed excise tax rates in the UAE include:

  • 100% for tobacco and tobacco products
  • 100% for energy drinks
  • 50% for carbonated drinks

When goods are imported into the UAE, the importer is responsible for paying the correct amount of excise tax to the tax authority before removing the goods from the designated storage area. For locally produced goods, the producer must pay the excise tax before removing the goods from the place of production. Tax procedure measures in the UAE for purposes of regulating all taxes—including value added tax (VAT) and excise taxes—have been approved and will be publicly available. 

KPMG observation

Excise taxes could affect customer prices on the three categories of goods. Businesses trading in these goods need to consider a review of their pricing strategies, determine the full impact of the excise tax, and be certain they understand what needs to be done to be fully compliant.


Read a May 2017 report prepared by the KPMG member firm in the UAE

The KPMG logo and name are trademarks of KPMG International. KPMG International is a Swiss cooperative that serves as a coordinating entity for a network of independent member firms. KPMG International provides no audit or other client services. Such services are provided solely by member firms in their respective geographic areas. KPMG International and its member firms are legally distinct and separate entities. They are not and nothing contained herein shall be construed to place these entities in the relationship of parents, subsidiaries, agents, partners, or joint venturers. No member firm has any authority (actual, apparent, implied or otherwise) to obligate or bind KPMG International or any member firm in any manner whatsoever. The information contained in herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 4366, 1801 K Street NW, Washington, DC 20006.

Connect with us


Request for proposal