The UAE introduced excise tax through Federal Decree-Law No. (7) of 2017 to discourage the consumption of excise goods that pose risks to human health or the environment. These include tobacco products, carbonated beverages, sweetened drinks, and electronic smoking devices. This measure not only aligns with broader public health goals but also supports national sustainability efforts.

However, for businesses involved in the production, import, or handling of these goods, excise duty can significantly impact operating costs. To address this, the excise tax regulations provide a mechanism for eligible entities to recover excess or misapplied taxes through a tax refund process.

Businesses that meet the FTA's criteria can file an excise tax refund request, reclaiming excise duty paid under specific circumstances. Understanding the procedural steps, documentation, and conditions for claiming a refund of excise tax is critical to avoid compliance issues or delays.

In this guide, we explain the full excise duty refund process in the UAE—covering eligibility, document requirements, and how to align with FTA’s excise tax rules to ensure your claim is accepted.

Excise Tax in the UAE: Legal Framework & Tax Application

Excise duty is an indirect tax levied on excisable goods either produced, imported, or stockpiled in the UAE. The excise tax rates are substantial, often set at 50% or 100% of the retail price or assessed ad valorem, making compliance critical for businesses.

This tax applies to:

• Tobacco and raw tobacco

• Carbonated and energy drinks

• Sweetened beverages

• Electronic smoking devices and extracts intended for vaping

Businesses engaged with these products must obtain excise tax registration, file monthly excise tax returns, and accurately track and declare each movement in the supply chain, including transactions within tax warehouses or designated zones.

In some cases, however, excise tax liability can be reversed by applying for a refund of excise—especially when goods are exported, destroyed, or used in non-taxable manufacturing.

Who Can Claim an Excise Duty Refund?

The UAE’s Federal Tax Authority (FTA) allows eligible businesses and entities to claim an excise duty refund under specific scenarios outlined in the excise tax regulations and executive rules. A refund is only possible where excise tax paid can be substantiated and the business complies with all documentation requirements through the FTA’s e-Services portal.

The following are key circumstances where a tax refund may be granted:

🔹Export of Excise Goods Outside the UAE

Businesses that export excise goods such as carbonated drinks, energy drinks, or electronic smoking devices can recover the excise tax paid, provided valid customs export declarations and transport documents support the claim.

🔹Use of Excise Goods as Raw Materials

If excise duty has been paid on products like sweetened beverages or nicotine liquids that are then used as raw materials in the manufacture of non-excisable products, the taxpayer may be eligible to claim an excise tax refund on the input cost.

🔹Stock That Is Damaged or Destroyed

When excisable goods are damaged or destroyed under the supervision of the FTA, and supported by proper inventory reconciliation, destruction reports, and compliance checks, businesses can claim a refund for the excise tax payable on those goods.

🔹Exempt Entities and Diplomatic Missions

Entities such as foreign embassies, consulates, international organizations, and other government-related bodies can recover excise tax paid on approved purchases, provided the transactions meet exemption conditions set by the FTA.

🔹Movement Within Duty-Suspension Zones

Goods transferred or stored within designated zones (also known as duty-suspension zones) without being released for consumption are generally exempt from paying excise tax. In such cases, any previously paid excise duty becomes refundable.

In every case, the excess excise tax claimed as a refund must be carefully documented. Compliance with the FTA’s audit trail requirements—including transaction records, inventory logs, and verified tax invoices—is essential for successful processing of the excise duty refund.

How to Claim an Excise Tax Refund in the UAE

Step 1: Identify Refund Eligibility

Determine the tax period and the specific event triggering eligibility—such as an export, destruction, or internal use of excise goods for non-taxable purposes. This must align with FTA rules.

Step 2: Prepare Required Documents

Refund success depends on submitting necessary documents. These include:

• Customs declarations

• Excise tax invoices

• Inventory reports verified by your warehouse keeper

• FTA-issued destruction approvals (if applicable)

• A valid Tax Registration Number (TRN)

• A registered bank account linked to your EmaraTax profile

Ensure documents are complete and that your excise tax return entries match your refund form data.

Step 3: Submit the Refund Application via EmaraTax

Access the FTA portal, complete the excise tax refund form, and upload the documentation. Ensure entries are aligned with EmaraTax filings to avoid rejection.

Step 4: Monitor FTA Review

The Federal Tax Authority will assess the application. They may approve, request clarification, or conduct an audit of your warehouse, stock records, or previous tax returns. Refunds are either credited to your excise tax account or transferred to your linked bank account.

Why Excise Refunds Are Missed—and How to Fix It

Many businesses lose out on eligible excise tax refunds due to:

• Poor understanding of complex tax regimes

• Lack of awareness around refund process

• Fear of audits or rejection

• Confusion navigating the FTA e-Services portal

• Delayed action beyond the refund application deadline

The process is detail-heavy. Unlike VAT refund, this involves rigorous documentation and data accuracy across supply chains and systems.

How Young & Right Simplifies the Excise Duty Refund Process

At Young & Right, we specialize in helping taxable persons across industries reclaim overpaid tax on excise goods such as energy drinks, carbonated beverages, and tobacco-related products. Our refund service is fully compliant with UAE excise tax regulations and the Federal Tax Authority’s (FTA) documentation standards. Here’s how we streamline your refund journey:

1. Full-Service Filing

From assessing refund eligibility to submitting refund applications, liaising with the FTA, and securing approvals, we manage the entire lifecycle of your excise duty recovery. Whether the refund relates to exports, damaged goods, or adjustments in retail price, our team ensures your submission is timely and accurate.

2. Document Validation

We conduct audit assistance of your excise records, tax invoices, stock movement logs, destruction reports, and export documents. This guarantees that all required data meets FTA guidelines and avoids refund rejections.

3. TRN & EmaraTax Alignment

Your Tax Registration Number (TRN), excise tax submissions, and associated filings are reviewed to ensure they match across EmaraTax and the FTA portal—minimizing discrepancies and increasing approval rates for excess refundable tax claims.

4. Reconsideration & Appeals

If your refund application is denied, we handle the appeals process by referencing executive regulations, providing clarifying documentation, and defending your case through formal FTA channels.

5. Ongoing Excise Compliance

Our team assists with monthly excise tax returns, warehouse tax supervision, and alignment with the GCC Common Customs Tariff. We also provide advisory on beneficial public services and tax-exempt entities. This ongoing compliance support ensures you're always audit-ready and avoid unnecessary liabilities.

At Young & Right, our mission is to help clients recover what they’ve rightfully paid—ensuring your business stays compliant while maximizing refund value. We don't just help you pay taxes, we help you recover them where allowed—while supporting the FTA’s goal to reduce consumption of harmful goods.

Conclusion

The UAE government enforces excise tax to reduce the harm caused by certain goods—but it also allows fair recovery of tax when goods are exported, destroyed, or exempt. Businesses shouldn’t bear unpaid tax burdens when refund rights exist.

Navigating the refund of excise may seem challenging, but with expert support, proper documentation, and timely filing through EmaraTax, your business can recover what’s owed—accurately and confidently.

Let Young & Right manage the process while you stay focused on operations.