What is excise tax in the UAE?

1. Introduction 1.1. Overview 1.1.1. Short brief Excise tax was introduced with effect from 1 October 2017 in the UAE. Excise Tax is an indirect tax levied on specific excise goods which are either imported into the UAE, produced within the UAE, released from a designated zone in the UAE or stockpiled in the UAE. VAT was introduced with effect from 1 January 2018 in the UAE. As a general consumption tax on the supply of goods and services, it applies to those supplies which take place within the territorial area of the UAE. The introduction of these new taxes in the region also created a need for guidelines to govern the administration of taxes in the UAE, and in particular to introduce a governance framework for the interaction between taxable persons and the Federal Tax Authority (“FTA”). This framework is enshrined in the Federal Law No. 7 of 2017 on Tax Procedures (“the FTP Law”) and Cabinet Decision No. 36 of 2017 on the Executive Regulations of Federal Law No. 7 of 2017 on Tax Procedures (“the FTP Executive Regulations”). The FTP Law defines the concept of a tax agent, a natural person given authority to liaise with the FTA in relation to the tax affairs of another person. International best practice indicates that tax agents play an important role in the administration of a tax system – they are independent of the tax authority, but serve a role in better facilitating the interactions between the tax authority and the tax paying community. Tax agents work for and on behalf of their clients by representing them in their affairs with the FTA and assisting in easing the compliance burden of taxable persons by providing an option whereby certain compliance functions can be performed by the tax agent on the taxable person’s behalf. The FTA commits to work collaboratively with tax agents in order to encourage the ease of doing business in the UAE. 1.1.2. Purpose of this document The role of a tax agent is valued by the FTA and the tax paying community alike, and as a result, it is important that those appointed as tax agents maintain certain standards of professionalism and ethical conduct. This document contains guidance on the expected professional standards and code of ethics for tax agents along with the roles and responsibilities of tax agents established under the FTP Law and its Executive Regulations. It also sets out the authority of the FTA in appointing and monitoring the standards upheld by tax agents, and its authority to deregister tax agents in certain cases. 2

This is not an official translation: Excise Goods, Excise Tax Rates and the Methods of Calculating the Excise Price Cabinet Decision No. 52 of 2019 Issue Date: 4th of August 2019 The Cabinet has decided: - Having reviewed the Constitution; - Federal Decree-Law No. 13 of 2016 on the Establishment of the Federal Tax Authority; - Federal Law No. 7 of 2017 on Tax Procedures; - Federal Decree-Law No. 7 of 2017 on Excise Tax; - Federal Decree-Law No. 32 of 2017 ratifying the Common Excise Tax Agreement of the States of the Gulf Cooperation Council (GCC); - Cabinet Decision No. 38 of 2017 on Excise Goods, Excise Tax Rates and the Methods of Calculating the Excise Price; - And pursuant to the presentation of the Minister of Finance,

This is not an official Translation: Excise Goods, Tax Rates or Amounts Imposed on Excise Goods, and the Methods of Calculating the Excise Price Cabinet Decision No. 197 of 2025 – Issued 27 Nov 2025 (Effective from 1 Jan 2026) The Cabinet has decided - Having reviewed the Constitution, - Federal Law No. 1 of 1972 on the Competencies of Ministries and Powers of the Ministers, and its amendments, - Federal Decree-Law No. 13 of 2016 on the Establishment of the Federal Tax Authority, and its amendments, - Federal Decree-Law No. 7 of 2017 on Excise Tax, and its amendments, - Federal Decree-Law No. 28 of 2022 on Tax Procedures, and its amendments, - Federal Decree No. 32 of 2017 ratifying the Common Excise Tax Agreement of the States of the Gulf Cooperation Council (GCC), - Cabinet Decision No. 52 of 2019 on Excise Goods, Excise Tax Rates and the Methods of Calculating the Excise Price, and - Pursuant to the presentation of the Minister of Finance and approved by the Cabinet.