FDL 7/2017 — Excise Tax Law

Factual summary

The federal Excise Tax law, applied from 1 October 2017. It taxes the production, import, release from a Designated Zone and stockpiling of Excise Goods chosen by Cabinet Decision, and sets registration, Designated Zones and Warehouse Keepers, deductible tax, returns and payment, refunds and tax evasion cases. Since Federal Decree-Law No. 7 of 2025 (1 October 2025) the Cabinet may set the tax as a percentage of the Excise Price (up to 200%) or as a specific amount per unit (up to AED 100). Goods, rates and the price method are in Cabinet decisions — from 1 January 2026 Cabinet Decision No. 197 of 2025, which repealed Cabinet Decision No. 52 of 2019.

What it means in practice Professional insight

Who: any business that produces, imports, stockpiles or releases excise goods, and operators of Designated Zones. What to check: registration before the first taxable activity (30-day window), tax-inclusive shelf prices, the deduction cases in Article 16, and the current rates in the Cabinet decision.

Key provisions

• Art. 2 Tax is imposed on Excise Goods specified by Cabinet Decision in four activities: production in the State in the course of doing business, Import, release from a Designated Zone, and Stockpiling in the State in the course of doing business.
• Art. 3 As amended by Federal Decree-Law No. 7 of 2025, a Cabinet Decision sets the tax either as a percentage of the Excise Price, not exceeding (200%) of the Excise Price, or as a specific amount per unit of measurement, not exceeding AED 100 per unit, together with the unit of measurement, the basis of the specific amount and the method of calculating the Excise Price.
• Art. 5 No listed activity may be carried on before Tax Registration. The person conducting the activity and the Warehouse Keeper (Art. 4(1)(a) and (c)) apply within 30 days of the end of any month in which they carried out or intended to carry out the activity; since Federal Decree-Law No. 7 of 2025, a person liable under Art. 4(1)(b) applies within 30 days of becoming aware, or the date he should have become aware, that the person in Art. 4(1)(a) did not pay the Tax.
• Art. 11 Advertised prices of Excise Goods when sold must be inclusive of the Tax; the Executive Regulation sets the cases where prices do not include the Tax.
• Arts. 13, 14 A Designated Zone that meets the Executive Regulation conditions is treated as outside the State for Tax purposes, and Excise Goods may be transferred from one Designated Zone to another without Tax becoming due; the Executive Regulation sets the transfer controls and how the goods are kept, stored and processed there.
• Art. 16 As amended by Federal Decree-Law No. 7 of 2025, Deductible Tax is Tax paid on Excise Goods that were exported; that became a component of another Excise Good on which Tax is or will be due; that were not sold where the rate or amount of Tax on them decreased (to the extent of the decrease); or in other cases determined by the Authority under the controls it sets.
• Arts. 17–19 The Executive Regulation sets the Tax Period; the Taxable Person files a Tax Return at the end of each Tax Period and, as amended by Federal Decree-Law No. 7 of 2025, settles the Payable Tax within the period set in the Executive Regulation; a person excepted from registration under Art. 6(1) or 6(3) settles the Due Tax when importing.