Fees, taxes, and regulations for vape products in the UAE

6.6.24

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In recent years, the United Arab Emirates (UAE) has undergone a notable shift in its stance towards vapes and electronic cigarettes. It is worth mentioning that these items have progressed from being strictly prohibited to being legally purchasable, all under the watchful eye of stringent regulations and taxation.

This article aims to provide an overview of the latest news of the fees, taxes, and regulations governing vape products in the UAE. 

Regulatory Framework

Your vape product's journey from arrival in the UAE begins with compliance with myriad regulations. Dubai Municipality plays a significant role in ensuring standardization and metrology. Vendors must register their vape products with the Department of Economic Development to adhere to public health concerns and maintain a long term healthier population.

In a significant shift, Dubai’s the UAE’s authorities had lifted its ban on e-cigarettes and vaping products in April 2019. This move was part of a broader effort to curb rising tobacco use in the country, with the Ministry of Health and Prevention considering vape products as a relatively safer alternative to traditional cigarettes.

However, the legalization came with some caveats. To stay on the market, vape products in the UAE must now meet the Ministry of Industry & Advanced Technology's stringent standards. These regulations cover everything from the composition of e-liquids to the safety features of vaping devices, ensuring that products are high-quality and safe for consumers.

The regulatory landscape surrounding vape products in the UAE is quite comprehensive, with several key rules that businesses and individuals must follow. These rules pertain to product quality, labeling requirements, advertising restrictions, and more.

The UAE's commitment to responsible regulation and transparency is aimed at creating a vaping industry that puts consumer safety and well-being first. By adhering to these regulations, businesses can operate with confidence, knowing they're meeting the necessary standards and building trust with their customers.

The Role of Government Agencies in Regulating Vape Products

The UAE's vape product regulatory framework is a collaborative effort between various government bodies. The Ministry of Industry & Advanced Technology plays a leading role in this endeavor, being responsible for implementing and enforcing quality standards. The ministry closely scrutinizes the safety and conformity of vape products to regulations. Any company seeking to import or sell vape products in the UAE may be required to receive a trade license and should adhere to a specific federal law stipulated by the ministry. If a product fails to meet the necessary safety standards, it may not be allowed for sale in the market. Any vape product included in the market must first comply with the stipulated regulations.

The Emirates Authority for Standardization & Metrology (ESMA) is a federal body responsible for ensuring the quality of goods entering the UAE market. Both local and imported products must meet national standards, and anyone wishing to sell products in the UAE must obtain ESMA approval before they can be legally sold.

The Ministry of Health and Prevention also plays an essential role in the vape industry through the inclusion of health and safety related regulations. They are responsible for the legal development and enforcement of guidelines to ensure the safety and well-being of citizens and residents. These also include promoting public awareness campaigns which educate people about the importance of following vaping regulations. The Ministry also licenses commercial vape trading entities to ensure compliance with health standards and materials.

The Federal Tax Authority is responsible for administering the Excise Tax on vape products, ensuring that businesses accurately calculate and report their tax liabilities. Their role is essential in ensuring that the tax system is fair and equitable for all stakeholders involved in the vape industry.

The Cost of the Product Registration Process

The vape licensing process in the UAE is a more nuanced affair than one might think. It's essential for businesses to wrap their heads around the costs involved, as these fees can vary depending on the type and quantity of products being registered.

For e-liquids, the registration requires some serious legwork. You'll need to provide a detailed breakdown of the product's composition, including nicotine levels and other ingredients. The fee is then calculated based on the number of unique flavors being registered.

What's more, the testing is no joke. The UAE takes the quality and safety of vape products very seriously. These steps include chemical composition, stability, and packaging assessments. The costs attached to these tests are a crucial part of the overall registration process.

Registering vape devices also requires a thorough understanding of the product's technical specifications. The fee is determined by factors such as complexity and functionality.

To get your product certified for sale in the UAE, you'll need to shell out two separate fees:

Certificate issuance fee: This one goes to MoIAT and has been reduced to AED 670 per application, down from AED 5,000.

Document review fee: Payable to the notified body, this one stays the same at AED 800 per application.

Here's a breakdown of the fees for different product categories:

  • For label products, the new fee is AED 670, down from AED 5,000. 
  • Product-liquid registration has also seen a reduction, from AED 5,000 to AED 670. 
  • Product-device registration is similarly affected, with the new fee being AED 670 instead of AED 5,000. 
  • RoHS registration, however, remains unchanged at AED 1,000.

Fees and Tax Rates

When it comes to vape products in the UAE, there are a range of fees and taxes to consider. Importers, for example, need to pay a registration fee of AED 10,000 for each brand of electronic cigarette or vaping device they want to bring into the country.

But it's the Excise Tax that really adds complexity to the equation. Introduced in December 2019, this tax is part of the government's push to reduce harmful consumption. The rates are quite straightforward, at 100% on tobacco products, e-cigarettes, and liquids used in them, and 50% on products with added sugar or sweeteners.

The tax on vape devices and e-liquids isn't just a simple flat rate. It's actually based on the retail price of the product, not the manufacturing cost. That means the actual tax burden can vary depending on how the retailer chooses to price their items.

But underpinning all this is a broader effort by the UAE government to ensure the products out there are safe and of high quality. By imposing standards and labeling requirements, they're looking out for consumers, making sure they're not getting ripped off by harmful substances or misleading marketing claims.

Impact of Regulations and Taxes on the Vape Business in the UAE

In recent years, the vape market in the UAE has been on a rollercoaster ride of growth, despite the tough regulations and hefty taxes. According to Research and Markets, the market is expected to grow by a staggering 9.74% over the long-term from 2021 to 2026, making it a significant player in the world of vaping.

So, what's driving this growth? Many smokers are turning to vaping as a safer alternative to traditional nicotine products, and the UAE government is actively promoting these less harmful options, a move that has been in place since the restrictions on traditional cigarettes were implemented.

But, as the market grows, retailers and manufacturers are facing some major challenges. The strict tobacco control regulations and high taxes can make it tough for smaller businesses to keep up, and the prices can be a deterrent for new customers, making time of the essence for them to adapt.

Looking ahead, it's likely that the fees and regulations for vape products in the UAE will continue to evolve, both in the short-term and long-term. As the industry grows and changes, the government agencies responsible for regulating it will need to adapt and refine their policies to stay ahead of the curve.

What does this mean for businesses and individuals in the industry? It means staying informed, being flexible, and understanding the ever-changing landscape of vape regulations in the UAE, all within a specific time frame. By doing so, you can ensure your business remains compliant and successful in this growing market.

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