By Timothy S. Donahue
Top Takeaways:
- New tax floor: The United Arab Emirates will require e-liquids to carry a minimum excise value of AED1 per milliliter starting Sept. 1.
- Tax rate unchanged: The UAE’s 100% excise tax on e-liquids and electronic smoking products remains unchanged.
- Pricing impact: The measure is expected to have its greatest effect on lower-priced vape liquids, potentially increasing costs for sellers.
The tax isn’t changing. The floor is. The United Arab Emirates is tightening its excise tax framework for vaping products by introducing a minimum taxable value for e-liquids.
The move is intended to standardize tax calculations and prevent products from being assessed at artificially low values.
Under Cabinet Decision No. 137 of 2026, announced by the Ministry of Finance, e-liquids for electronic smoking devices will carry a minimum excise price of AED1 per milliliter, regardless of whether they contain nicotine. The new requirements take effect on Sept. 1 and replace provisions established under Cabinet Decision No. 55 of 2019.
The Ministry of Finance said the change is intended to improve tax compliance and to establish a consistent valuation methodology across tobacco and electronic smoking products.
The decision does not increase the UAE’s existing excise tax rate.
Vapes and e-liquids remain subject to the country’s 100% excise tax, the same rate currently applied to cigarettes and several other tobacco products. Instead, the regulation sets the minimum value used to calculate that tax.
Under the new framework:
• A 10-milliliter bottle of e-liquid will have a minimum excise value of AED10.
• A 30-milliliter bottle will have a minimum excise value of AED30.
If the product’s excise value, calculated under existing rules, exceeds those minimums, the higher value will continue to apply.
The practical impact will be concentrated on lower-priced products. Manufacturers and importers who previously declared excise values below AED1 per milliliter will now calculate taxes based on the new minimum valuation.
The decision also leaves the existing minimum excise values for traditional tobacco products unchanged. Cigarettes will continue to carry a minimum excise value of AED0.40 per cigarette, while waterpipe tobacco and similar products will remain subject to a minimum value of AED0.10 per gram.
