The United Arab Emirates (UAE) has consistently aligned its tax policies with international standards and regional agreements, particularly within the Gulf Cooperation Council (GCC). One such key development is Cabinet Decision No. 52 of 2019, which defines Excise Goods, Excise Tax Rates, and the methods of calculating the Excise Price. Amended by Cabinet Decision No. 99 of 2025, this legislation remains central to excise tax administration in the UAE.
Scope of Excise Goods
Excise tax applies to the following goods:
- Tobacco and tobacco products (including electrically heated cigarettes).
- Electronic smoking devices and tools.
- Liquids used in electronic smoking devices and tools.
- Carbonated drinks (excluding unflavoured aerated water).
- Energy drinks (containing stimulants like caffeine, taurine, ginseng, or guarana).
- Sweetened drinks (with added sugar or sweeteners, except certain exclusions such as baby formula, dietary/medical beverages, or drinks with at least 75% milk or milk substitutes).
Notably, alcoholic beverages are excluded from the above categories.
Special Provisions
- Dual classification: If a product qualifies under multiple categories, the higher tax rate applies. A drink classified as both sweetened and carbonated will be treated as a carbonated drink.
- Goods already taxed: If a carbonated, energy, or sweetened drink (Articles 6, 7, or 8) has already been taxed, any beverage made from it at the point of sale for a non-taxable person will not be treated as an excise good, and no additional tax will apply.
- Smoking cessation products: Certain tobacco alternatives specifically designed to help quit smoking are exempt.
Excise Tax Rates
The applicable excise tax rates are as follows:
Tobacco and tobacco products | 100% |
Liquids used in electronic smoking devices and tools | 100% |
Electronic smoking devices and tools | 100% |
Carbonated drinks | 50% |
Energy drinks | 100% |
Sweetened drinks | 50% |
Calculation of Excise Price
The Excise Price is determined as the higher of:
- The standard price list published by the Federal Tax Authority (FTA), if available.
- The designated retail sales price, net of tax.
The tax element is computed as:
- 50% goods: One-third of its designated retail sales price.
- 100% goods: Half of its designated retail sales price.
Special calculation mechanisms may apply to concentrates, powders, gels, and extracts as decided by the Minister.
Designated Retail Sale Price
The designated retail price is the higher of:
- The importer’s/producer’s recommended retail price, excluding VAT.
- The average market retail price, excluding VAT, as determined by FTA procedures.
It excludes inflated prices charged in restaurants, hotels, or similar establishments for on-site consumption.
Repeal and Implementation
- Cabinet Decision No. 38 of 2017 was repealed by this legislation.
- The Ministry of Finance sets the effective date, which began before 1 January 2020.
- Amendments made under Cabinet Decision No. 99 of 2025 became effective from 9 September 2025.
Conclusion
Cabinet Decision No. 52 of 2019, along with its 2025 amendments, underscores the UAE’s commitment to effective taxation, public health, and regional policy harmonization. By clearly defining excise goods, setting transparent tax rates, and empowering the FTA, the legislation ensures accountability and consistency across the excise tax framework.
For businesses, timely compliance and awareness of updates are critical. For consumers, the framework reinforces the government’s broader health-driven taxation strategy.
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