Compliance

Excise Tax Minimum Prices & Small Business Relief in UAE: What Businesses Must Know

The UAE has just introduced a new minimum excise price for e-liquid products and extended small business relief until end-2029—crucial updates for SMEs, retailers, and manufacturers.

By NomadicTax Research Team • 5-8 min read • September 1, 2026

## Introduction In August 2026, the UAE introduced two significant policy changes impacting businesses of all sizes: a **minimum excise price** for liquids used in electronic smoking devices (effective 1 September 2026), and an **extension of Small Business Relief** under the corporate tax regime until **31 December 2029**.([mof.gov.ae](https://mof.gov.ae/ar/news/ministry-of-finance-announces-decision-introduces-a-minimum-excise-price-for-liquids-used-in-electronic-smoking-devices-effective-1-september-2026/?utm_source=openai)) This article breaks down what these changes mean for product pricing, compliance, and cash flow management. ## Minimum Excise Price for E-Liquids ### What changed - A **minimum excise price** of **AED 1 per milliliter** was imposed for liquids used in electronic smoking/vaping devices, starting 1 September 2026. - Minimum excise pricing already existed for cigarettes, hookah tobacco, etc.; this adds e-liquids to the scope.([mof.gov.ae](https://mof.gov.ae/ar/news/ministry-of-finance-announces-decision-introduces-a-minimum-excise-price-for-liquids-used-in-electronic-smoking-devices-effective-1-september-2026/?utm_source=openai)) ### Implications for retailers and manufacturers - **Pricing strategy**: Products currently sold below this line must increase their prices or absorb extra cost. - **Labeling & packaging compliance**: Update cost calculations, ensure excise tags or stamps (if required) meet new value bands. - **Supply chain assessment**: Imported ingredients and manufacturing costs must be scrutinized; potential duty/excise base recalculation. ## Small Business Relief Extended to End-2029 ### What is the relief? Under UAE Corporate Tax rules, businesses with annual revenue up to **AED 3 million** qualify for **Small Business Relief**, which simplifies compliance obligations—lower reporting burdens and possible administrative exemptions.([mof.gov.ae](https://mof.gov.ae/en/news/ministry-of-finance-announces-extension-of-small-business-relief-for-corporate-tax-purposes-until-31-december-2029/?utm_source=openai)) ### What's new? - The relief was previously time-limited; the new Ministerial Decision **extends its availability through tax periods ending on or before 31 December 2029**. - Threshold and eligibility criteria (e.g. AED 3 million revenue) remain in force for periods from 1 June 2023 to 31 December 2029.([mof.gov.ae](https://mof.gov.ae/en/news/ministry-of-finance-announces-extension-of-small-business-relief-for-corporate-tax-purposes-until-31-december-2029/?utm_source=openai)) ## Action Steps for Businesses - **Review current excise-taxed product pricing**: Particularly for e-liquids, understand your cost base and recalculate margins. - **Audit product lines**: Are some SKUs selling under AED 1/ml? If yes, plan adjustments or phased discontinuations. - **Ensure excise returns and registration are up to date**: If you're a new importer / manufacturer, establish compliance early. - **Leverage small business relief**: If revenue is under AED 3 million, ensure your accounting/reporting is simplified as allowed; keep scrutiny over how relief may phase out after 2029. - **Plan for scalability**: If you expect to exceed threshold, prepare for full corporate tax obligations ahead of time. ## Example Situation Suppose a UAE retailer sells a popular e-liquid at **AED 0.85/ml**. With the new rule (as of 1 September 2026), this product must be rebranded or repriced. Similarly, a small café with AED 2.5 million revenue per year can continue under reduced compliance regime until end of 2029—but if 2028-29 revenue jumps over AED 3 million, full corporate tax compliance starts. ## Broader Impact and Risks - For manufacturers, raw input costs may rise as excise tax and administration increase. - Small businesses will benefit from more certainty with the extension, but there’s potential “cliff effect” when revenue crosses threshold. - Government collects more predictable excise revenues; public health may benefit from higher cost for e-liquids. ## Key Takeaways - From **1 September 2026**, all e-liquids must be priced at least AED 1/ml for excise tax purposes. - Small Business Relief in the UAE extends until **31 December 2029**, with the AED 3 million revenue threshold remaining. - Businesses should **audit**, **adapt pricing**, **update compliance**, and **plan growth** with these changes in mind. - If unsure about your classification, product category, or compliance obligations, consult a tax professional early.