Excise & Customs
Can Tourists Refund Excise Tax?
Tourist VAT refunds do not extend to excise: excise stays in the price tourists pay. The tourist-refund boundary explained.
can tourists refund excise tax?
Tourists can reclaim VAT, not excise: the excise stays buried in the shelf price. The practical consequences: separate registrations, separate returns, separate deadlines — but interacting calculations where one tax sits inside the other's base. Businesses usually need to comply with both in parallel, keeping the filings consistent where they touch. This page maps the boundary so each obligation lands in the right return.
Basis: UAE Federal Tax Authority / Ministry of Finance
- Excise scope
- 5 categories of goods; 100% or per-litre
- Cabinet Decision No. 197 of 2025
- Registrations
- Separate — one does not imply the other
- Federal Decree-Law No. 7 of 2017 on Excise Tax
- Returns
- Separate filings; separate periods
- Cabinet Decision No. 37 of 2017 (Executive Regulation of the Excise Tax Law)
- Interaction
- Excise sits inside the VAT base
- Federal Decree-Law No. 7 of 2017 on Excise Tax
# The two taxes side by side
Tourists can reclaim VAT, not excise: the excise stays buried in the shelf price.
Confusion between the two usually comes from three places: assuming VAT registration covers excise (it does not), assuming excise paid is recoverable like input VAT (it is not — it is a cost), and filing one return's figures on the other's form. Each of these errors is common, each is penalised, and each is prevented by treating the taxes as parallel tracks from day one.
| Dimension | Excise tax | Comparator |
|---|---|---|
| Scope | 5 listed goods categories | Varies — see analysis below |
| Registration trigger | The activity (import/produce/stockpile) | Varies |
| Return period | Monthly | Varies |
| Recoverability | Not deductible — a cost | Varies |
# Where the two interact
The main interaction is the stacking order: excise tax forms part of the value on which VAT is calculated for excise goods. Calculate excise first, add it to the price, then apply VAT. At import, the stack is customs duty, then excise, then VAT on the excise-inclusive total.
Designated zones suspend both taxes, but under different rules — do not assume the VAT treatment answers the excise question or vice versa. Tourist VAT refunds do not extend to excise: the excise stays in the price the tourist pays.
# Compliance in parallel
Run two calendars: monthly excise (15-day deadline) alongside whatever the comparator requires. Keep the underlying data consistent — the sales figures behind the excise return and the VAT return should reconcile where they overlap, because the FTA cross-checks.
Assign ownership clearly: one person or team should own the reconciliation between the two filings, not two teams filing blind to each other. Most cross-tax errors are discovered by the FTA's matching, not by the business.
# Worked comparison: the import stack
Take an energy drink consignment with a customs value of AED 10,000. Customs duty at 5% adds AED 500, giving AED 10,500. Excise at 100% of the excise price then applies — and here the RSP-based excise price, not the customs value, drives the number. Suppose the designated RSPs imply AED 8,000 of excise: the excise-inclusive value becomes AED 18,500, and 5% VAT adds AED 925.
Total import taxes: AED 500 duty + AED 8,000 excise + AED 925 VAT = AED 9,425 on AED 10,000 of goods. The excise dominates the stack — which is precisely why classification and RSP accuracy matter more than duty optimisation for excise goods.
| Layer | Base | Tax |
|---|---|---|
| Customs duty (5%) | AED 10,000 customs value | AED 500 |
| Excise (100%) | RSP-based excise price | AED 8,000 (illustrative) |
| VAT (5%) | AED 18,500 excise-inclusive | AED 925 |
| Total | AED 9,425 |
# Planning across the boundary
Structure decisions — where to warehouse, how to price, whether to use a designated zone — should model both taxes together. A zone defers both; a price change moves the excise base and therefore the VAT base; an export recovers excise and zero-rates VAT through separate mechanisms.
Get advice that covers both: an adviser who only knows VAT will miss the excise angles, and vice versa. The boundary is where the expensive mistakes live.
Tax rules change: confirm the current position on tax.gov.ae before you file, pay or rely on any figure on this page.
Sources and legal basis
Legislation and decisions3
- Federal Decree-Law No. 7 of 2017 on Excise Tax
- Cabinet Decision No. 197 of 2025
- Cabinet Decision No. 37 of 2017 (Executive Regulation of the Excise Tax Law)
Authorities, systems and registers3
- Federal Tax Authority (FTA)
- EmaraTax
- Tax Registration Number (TRN)
Terms used2
- Can Tourists Refund Excise Tax?
- Excise vs VAT interaction
- Cabinet Decision No. 197 of 2025 (unofficial translation, PDF)UAE Federal Tax Authority / Ministry of Finance
- Excise Tax legislation and guidesUAE Federal Tax Authority
Rates, thresholds and deadlines change. Every figure above is linked to the authority that publishes it — if the two ever disagree, the authority is right and this page is out of date. Tell us and we will fix it.
Frequently asked questions
Are excise tax and VAT the same thing?
No. Excise tax is a selective tax on five categories of goods (tobacco, vaping products, energy drinks, sweetened drinks) at 100% or per-litre rates. VAT is a broad 5% consumption tax on most goods and services. They have separate registrations, separate returns and separate deadlines — but excise forms part of the VAT base on excise goods.
Do I need to register for both excise tax and VAT?
Quite possibly. VAT registration follows turnover (AED 375,000 threshold); excise registration follows the activity of importing, producing or stockpiling excise goods, with no threshold. Most excise businesses trigger both. Neither registration implies or replaces the other. Plan for dual-track compliance from the start.
Can I deduct excise tax like input VAT?
No. Excise tax is not recoverable — it is a cost of the goods, not an input tax credit. Article 9(2) of Cabinet Decision No. 197 of 2025 confirms tax paid cannot be treated as deductible tax. Account for it inside inventory and cost of sales.
Which is calculated first, excise tax or VAT?
Excise first. Calculate the excise on the goods, add it to the price, then charge VAT on the excise-inclusive total. At import the full stack is: customs value, plus customs duty, plus excise, with VAT applied to the resulting total.
Which adviser should handle both taxes?
One with demonstrable depth in each — excise specialists who also run VAT compliance, or a firm that staffs both. Ask how they reconcile the two returns, who owns the cross-tax calendar, and for an example of an excise-VAT interaction they have handled. The boundary between the taxes is where the expensive mistakes live.