How is excise tax calculated on sweetened drinks now?

Article 10 – Tax Rates and Amounts 1. For the purposes of Article 3 of the Decree-Law, Tax shall apply to the Excise Goods stipulated under Article 2 of the Decision pursuant to the following rates or amounts: Excise Goods 1 2 3 4 5 Tax Rate or Amount in AED 100% 100% 100% 100% Tobacco and tobacco products. Liquids used in electronic smoking devices and tools. Electronic smoking devices and tools. Energy drinks. Sweetened drinks that contain 5 (five) grams or more but less than 8 (eight) grams sugar or other sweeteners per 0.79 per litre 100 (one hundred) millitre. 6 Sweetened drinks that contain 8 (eight) grams or more 1.09 per litre sugar or other sweeteners per 100 (one hundred) millitre. Cabinet Decision No. 197 of 2025 – As published by the Ministry of Finance 5 7 Sweetened drinks that contain less than 5 (five) grams 0 per litre sugar or other sweeteners per 100 (one hundred) millitre. 8 Sweetened drinks that contain only artificial sweeteners, or artificial sweeteners and less than 5 (five) grams sugar 0 per litre or other sweeteners per 100 (one hundred) millitre. 2. For the purposes of Clause 1 of this Article, the quantity of sugar or other sweeteners in concentrates, powders, gels, and extracts that meet the definition of Sweetened Drinks shall be calculated based on the final product form, in accordance with the Producer's guidelines. If guidelines regarding the quantity of sugar or other sweeteners in concentrates, powders, gels, and extracts are unavailable or proven inaccurate, the Authority shall determine the mechanism for calculating the percentage of sugar and other sweeteners in these goods. 3. For the purposes of Clause 1 of this Article, if a Sweetened Drink contains naturally occurring sugar in addition to added sugar or other sweeteners, the quantity of naturally occurring sugar in the beverage shall be calculated within the quantity of sugar or other sweeteners. 4. For the purposes of Clause 1 of this Article, if the calculation of the Tax on the Excise Good results in fractions of a Fils, the value of the Tax shall be rounded at the level of the good to the nearest four decimal places of the Dirham upon registration with the Authority, and the value of the Tax Due for the purposes of periodic returns shall be rounded to the nearest Fils, in accordance with the rules of arithmetic rounding.

Article 3 – Excise Price for Concentrates, Powders, Gel and Extracts 1. The Excise Price of concentrates, powders, gel, or extracts that can be transformed into carbonated drinks, energy drinks or sweetened drinks by mixing such goods with another product by the retailer, shall be the higher of the following: a. the price published by the Authority for the Excise Good in a standard price list that it issues, if applicable; Ministerial Decision No. 1 of 2025 – As published by the Ministry of Finance 2 b. The Designated Selling Price for this Good to the retailer that is identified, and declared by the importer or producer in respect of this excise good before any discounts or offers, after deducting the Tax included therein in accordance with the mechanism provided for in Clause (2) of Article (13) of Cabinet Decision No. 52 of 2019 referred to above. 2. For the purposes of implementing the mechanism referred to in paragraph (b) of clause (1) of this Article, the “Designated Selling Price” is the “Designated Retail Sales Price”. 3. The Excise Price of concentrates, powders, gel, or extracts that can be transformed into carbonated drinks, energy drinks or sweetened drinks, which are not referred to in Clause (1) of this Article, is the Excise Price calculated in accordance with Clause (1) of Article (13) of Cabinet Decision No. 52 of 2019 referred to above. 4. The Taxable Person shall keep the records required to evidence the “Designated Selling Price” of the excise good, and any deductions made thereon and the quantities sold.

Article 2 – Mechanism for Calculating the Percentage of Sugar and Other Sweeteners for Concentrated Products 1. Where the guidelines regarding the amount of sugar or other sweeteners in Concentrated Products are not available, or where such guidelines are proven to be inaccurate, the percentage of sugar and other sweeteners in such products shall be calculated in accordance with the following mechanism: a. The Taxable Person shall obtain a Laboratory Report on the Unit of Federal Tax Authority Decision No. 10 of 2025 – Unofficial translation 2 Concentrated Product showing the total amount of sugar and other sweeteners contained therein and submit such report to the Authority. b. The volume of the final Sweetened Drink of the Concentrated Product shall be calculated as per the following formula: Volume of the final drink = (total amount of sugar and other sweeteners content in gram as determined in Paragraph (a) of Clause 1 of this Article) X 20 c. The Authority shall determine the Dilution Ratio for the Concentrated Product as per the following formula: Dilution Ratio = (volume of the final drink calculated as per Paragraph (b) of Clause 1 of this Article) ÷ (volume (in millilitres) or weight (in grams) of the Unit of Concentrated Product referred to in Paragraph (a) of Clause 1 of this Article). 2. The following cases shall be excluded from the application of the mechanism referred to in Clause 1 of this Article: a. If the Concentrated Product is in a liquid form and the Laboratory Report shows that the total amount of sugar and other sweeteners is less than 5 grams per 100 millilitres, the Concentrated Product shall be classified under the Low-Sugar Category. b. If the Laboratory Report shows that the Concentrated Product contains only artificial sweeteners, the Concentrated Product shall be classified under the Artificially Sweetened Category.