How to Register for Excise Tax in the UAE: A Complete Guide

Excise tax in the UAE is a mandatory tax applied to specific goods that are considered harmful to health or the environment. Businesses involved in manufacturing, importing, storing, or distributing excise goods must register for excise tax with the Federal Tax Authority (FTA) before they can legally operate.

Many businesses delay or overlook excise tax registration, leading to penalties, supply chain disruptions, and compliance risks. Understanding the process of registration and ensuring all requirements are met can help businesses avoid financial and legal complications.

This guide provides a step-by-step approach to excise tax registration, ensuring that businesses complete the process smoothly and stay compliant with UAE tax regulations.

Who Needs to Register for Excise Tax?

Before beginning the registration process, businesses must determine whether they are required to register. Excise tax applies to specific industries and business activities, and failure to register on time can lead to heavy fines.

Excise tax registration is mandatory for businesses that:

1. Manufacture Excise Goods

If a company produces tobacco products, energy drinks, sweetened beverages, or electronic smoking devices, it must register for excise tax before manufacturing begins. Even if production is for domestic consumption or export, the business must comply with tax regulations.

2. Import Excise Goods into the UAE

Any business that imports excise goods into the UAE is required to register before bringing products into the country. Customs authorities will not release excise goods unless the business has an active excise tax registration and pays the applicable tax.

3. Stockpile or Store Excise Goods

Businesses that hold significant stock of excise goods for commercial purposes must register. This includes distributors, wholesalers, and retailers that store taxable goods before selling them to customers. The FTA may conduct audits to ensure that stockpilers have paid the required excise tax on stored goods.

4. Operate Warehouses for Excise Goods

Warehouse operators that store excise goods on behalf of other businesses may be required to register. If a business manages a warehouse where excise goods are kept before sale or distribution, it must maintain proper records and ensure compliance with excise tax rules.

Preparing for Excise Tax Registration

Before starting the registration process, businesses must gather all required documents and information. The FTA requires detailed records to verify business activities and ensure compliance.

1. Business Identification and Licensing

Companies must have a valid trade license that allows them to engage in activities related to excise goods. The trade license should be issued by the relevant UAE licensing authority, and its activities must align with the type of excise goods being handled.

2. Company Ownership and Contact Details

Businesses must provide details of their owners, directors, and key management personnel. This includes:

1. Emirates ID and passport copies for UAE nationals and residents.
2. Proof of residency for foreign investors or business owners.
3. Official business address and contact details, including email and phone numbers.

3. Customs Registration for Importers

Companies importing excise goods into the UAE must also be registered with UAE Customs. Before excise tax registration, businesses must link their customs registration with their FTA profile to ensure smooth clearance of excise goods.

4. Description of Excise Goods and Tax Liability

Businesses must clearly define the type of excise goods they handle and estimate the expected volume of sales, imports, or production. The FTA may request detailed descriptions, HS codes, or product specifications to confirm whether excise tax applies.

Having all documents ready before submitting the registration application helps businesses avoid delays and rejections during the approval process.

How to Register for Excise Tax in the UAE

Excise tax registration is completed online through the FTA e-Services portal. Businesses must follow a structured process to ensure that their application is correctly submitted and approved without complications.

1. Create an FTA e-Services Account

To begin, businesses must register an FTA e-Services account if they do not already have one. This account will be used for all tax-related filings, payments, and reporting. The registration process includes:

1. Entering the company name and trade license details.
2. Providing the business email and contact details for verification.
3. Creating a secure login ID and password for accessing the portal.

Once the account is verified, businesses can proceed to the excise tax registration section.

2. Complete the Excise Tax Registration Form

The excise tax registration form requires businesses to provide detailed company information and tax obligations. Key sections include:

1. Business details (trade name, license number, legal structure).
2. Description of excise goods handled, including product categories.
3. Excise tax registration reason (manufacturing, importing, warehousing, or stockpiling).
4. Customs registration details (if applicable).
5. Warehouse locations and stock details for storage businesses.

Businesses must ensure all data entered is accurate to prevent delays in approval. Incorrect or missing information may require additional clarifications from the FTA, extending the processing time.

3. Submit the Registration and Await Approval

Once the application is complete, businesses must submit it for FTA review. The processing time typically takes 5 to 10 working days, but delays may occur if:

1. The application contains missing or incorrect information.
2. The FTA requests additional documents for verification.
3. The business is selected for further review or an audit.

During this period, businesses should regularly check their FTA portal dashboard for updates and respond promptly to any requests.

Once approved, the business receives its Excise Tax Registration Number (TRN), which must be used in all excise tax filings, customs declarations, and business transactions related to taxable goods.

Excise Tax Compliance After Registration

Registering for excise tax is only the first step. Businesses must ensure ongoing compliance to avoid penalties, maintain smooth operations, and keep accurate tax records. Many companies make the mistake of focusing only on registration and neglecting the continuous tax obligations that follow. Failing to comply can lead to FTA audits, financial penalties, and disruptions in business operations.

To ensure full compliance after registering for excise tax, businesses must follow a structured approach that covers tax filing, payment procedures, record-keeping, and audits.

1. File Excise Tax Returns on Time Every Month

Once registered, businesses must submit monthly excise tax returns through the FTA e-Services portal. These returns must include a detailed report of all excise goods imported, produced, stored, and sold during the tax period.

Every tax return must be accurate and filed before the deadline, as late submissions result in automatic fines starting at AED 1,000. Consistently late filings can increase penalties over time.

To avoid issues, businesses should:

1. Set up automated tax filing reminders to ensure deadlines are met.
2. Verify all tax calculations before submission to prevent overpayment or underpayment.
3. Appoint a tax specialist or use accounting software to manage filings efficiently.

If a business fails to file a return, the FTA may assess the tax based on estimates, which could lead to higher-than-expected tax liabilities.

2. Pay Excise Tax in Full and on Time

Excise tax must be paid before excise goods are released into the market, meaning businesses must plan for tax payments in advance. The total tax due is calculated based on the value of the excise goods and applicable tax rates (50% or 100%).

Businesses that fail to pay excise tax on time may face:

1. Interest charges on overdue amounts, increasing the total tax liability.
2. FTA penalties that can escalate if the tax remains unpaid.
3. Possible restrictions on importing or selling excise goods.

To prevent payment issues, businesses should:

1. Maintain a tax reserve fund to ensure they always have enough funds to cover excise tax obligations.
2. Use online banking or payment gateways linked to the FTA portal to make tax payments smoothly.
3. Double-check all tax amounts before making payments to avoid discrepancies.

If a business is struggling with excise tax payments due to cash flow issues, it should seek professional advice to restructure its financial strategy and manage tax obligations effectively.

3. Maintain Accurate Tax Records for At Least Five Years

The FTA requires businesses to maintain detailed excise tax records for a minimum of five years. These records must be organized, up to date, and easily accessible in case of an audit.

Key documents that must be stored include:

1. Excise tax invoices for all purchases and sales.
2. Customs declarations for imported excise goods.
3. Stock reports showing opening and closing balances of excise goods.
4. Payment receipts and bank statements related to excise tax payments.
5. Warehouse storage records for excise goods held in stock.

Businesses that fail to maintain proper records may:

1. Face penalties for non-compliance.
2. Struggle with tax audits due to missing documents.
3. Lose the ability to challenge incorrect tax assessments from the FTA.

Using VAT-compliant accounting software can help businesses automate tax record-keeping and ensure compliance with FTA requirements.

4. Ensure Excise Tax Is Correctly Applied to Pricing and Sales

Excise tax must be included in the retail selling price of excise goods, meaning businesses must adjust pricing structures to reflect tax obligations.

Incorrect pricing strategies can lead to:

1. Selling excise goods at a loss if the tax is not included in the price.
2. Customer disputes due to unexpected price increases.
3. FTA fines for incorrect tax application on invoices.

To avoid these issues, businesses should:

1. Review pricing models to ensure excise tax is properly included.
2. Update sales invoices to clearly display excise tax calculations.
3. Train sales teams to explain excise tax to customers, preventing confusion.

If a business is unsure about how to incorporate excise tax into pricing, working with a tax consultant can help create a pricing model that is both compliant and profitable.

5. Conduct Internal Tax Audits to Detect Compliance Gaps

Regular internal tax audits help businesses identify and correct any compliance issues before the FTA conducts an official audit. An internal audit should check:

1. Whether all excise tax returns have been filed correctly.
2. If tax payments match the actual excise goods sold or imported.
3. Whether inventory records align with tax filings.

If discrepancies are found, businesses should:

1. Adjust tax filings as needed to reflect the correct tax amount.
2. Report any errors to the FTA before an official audit takes place.
3. Update internal tax policies to prevent future mistakes.

Frequent self-auditing reduces financial risk and ensures ongoing compliance with excise tax regulations.

6. Stay Updated on Excise Tax Law Changes

Excise tax regulations in the UAE are subject to updates and amendments, meaning businesses must stay informed about new tax rules, rate changes, and compliance requirements.

Failure to keep up with regulatory changes can result in:

1. Applying incorrect tax rates to excise goods.
2. Missing important deadlines or reporting changes.
3. Receiving penalties for outdated tax practices.

To stay updated, businesses should:

1. Subscribe to FTA newsletters and tax updates.
2. Attend industry workshops and tax compliance training.
3. Consult with tax professionals to ensure continuous compliance.

Proactively monitoring tax laws ensures that businesses remain compliant and avoid costly penalties.

7. Prepare for FTA Audits and Compliance Reviews

The FTA regularly conducts tax audits to ensure businesses are correctly filing excise tax returns, maintaining records, and complying with tax laws. These audits may be scheduled or conducted randomly, so businesses must always be prepared.

During an audit, the FTA may:

1. Request access to financial records and sales invoices.
2. Inspect warehouses and stockpiles of excise goods.
3. Verify tax filings and payments to ensure accuracy.

If compliance violations are found, the FTA may impose:

1. Fines for incorrect tax filings or missing records.
2. Penalties for underpaid excise tax.
3. Business restrictions or license suspensions in severe cases.

To ensure readiness for audits, businesses should:

1. Regularly review tax records and correct any discrepancies.
2. Conduct pre-audit assessments with tax consultants.
3. Keep all excise tax documents easily accessible for quick verification.

Proactive audit preparation reduces the risk of unexpected financial penalties and ensures smooth business operations.

How Protax Advisors Can Help with Excise Tax Registration

Many businesses struggle with excise tax registration, compliance, and reporting due to complex tax regulations. At Protax Advisors, we help businesses:

1. Complete excise tax registration accurately and on time.
2. Ensure compliance with tax laws to avoid penalties.
3. Manage tax filings, record-keeping, and excise tax payments.
4. Resolve excise tax audits and disputes efficiently.

If your business deals with tobacco, energy drinks, sweetened beverages, or electronic smoking devices, you must register for excise tax and comply with UAE tax laws.

Book a free consultation with Protax Advisors today, and let our experts handle your excise tax compliance while you focus on growing your business.