Federal Tax Authority Announcement: Excise Tax on Sugary & Sweetened Beverages

The Federal Tax Authority (FTA) announced the excise tax @ 50 percent on sweetened beverages will be effective as of December 1st, 2019, in accordance with the Cabinet and Ministry of Finance decisions issued in this respect. All producers, importers, and stockpilers of sweetened drinks should register in the Federal Tax Authority ‘s system if they haven’t until now. What are Sweetened Drinks Any product to which a source of sugar or sweetener is added and is produced as a ready-to-drink beverage and also includes concentrates, gels, powders, extracts, or any other product that can be converted into a sweetened drink. Sugar includes any type of sugar determined under Standard 148 of the GCC Standardization Organization under the heading “Sugar” and Sweeteners include any type of sweeteners determined under Standard 995 of the GCC Standardization Organization under the heading “Sweeteners Permitted in Food” any subsequent and relevant standards. Some example of Sugar is Dextrose, White Sugar, Glucose, Lactose, Fructose, etc. The following Goods shall be excluded from the definition of sweetened drinks by the Cabinet:-

• Ready-to-drink beverages containing at least 75% milk or milk substitutes.
• Baby formula, follow up formula or baby food.
• Beverages consumed for special dietary needs as determined under Standard 654 of the GCC Standardization Organization under the heading “General Requirements for Prepackaged Foods for Special Dietary Use” and any subsequent and relevant standards.
• Beverages consumed for medical uses as determined under Standard 1366 of the GCC Standardization Organization under the heading “General Requirements for Handling of Foods for Special Medical Purposes”, and any subsequent and relevant standards.

How can MB Group help? We have a dedicated team of Excise Tax specialists to help you in smooth implementation of  the new Excise Tax regulations in the following ways:

1. Identification of Products on which Excise Tax will be applicable
2. Impact assessment of Excise Tax on Price & Profitability of the company
3. Registration of Excise Tax & Warehouse Keeper Registration
4. Compliance
5. Excise Tax advisory
6. Training Session on Excise Tax

Last Updated: 10^th October 2019 This article is contributed by:  Vipin Ahuja Associate Director

Tag: Excise Tax, FTA, TAX in UAE, UAE Tax Laws