What’s exempted from ‘sweetened drinks’ excise

By Eudore R. Chand

ABU DHABI 25 August 2019: The Federal Tax Authority has explained that sweetened drinks are any product to which a source of sugar or sweetener is added and is produced as either a ready-to-drink beverage or as concentrates, gels, powders, extracts, or any other form that can be converted into a sweetened drink.

It said sugar includes any type of sugar determined under Standard 148 of the GCC Standardisation Organisation and any subsequent relevant standards. Meanwhile, sweeteners include any type of sweeteners determined under Standard 995 of the GCC Standardisation Organisation and any subsequent relevant standards.

Not Included

But beverages that are not included in the new tax are:

  • Ready-to-drink beverages containing at least 75 per cent milk
  • Ready-to-drink beverages containing at least 75 per cent milk substitutes
  • Baby formula or baby food
  • Beverages consumed for special dietary needs, as determined under Standard 654 of the GCC Standardisation Organisation under the heading ‘General Requirements for Pre-packaged Foods for Special Dietary Use’ and any subsequent and relevant standards; and finally,
  • Beverages consumed for medical uses, as determined under Standard 1366 of the GCC Standardisation Organisation under the heading ‘General Requirements for Handling of Foods for Special Medical Purposes’, and any subsequent and relevant standards.

e-Cigarettes

The FTA clarified that e-liquids include all liquids used in electronic smoking devices and tools and the like, whether or not containing nicotine or tobacco. Meanwhile, e-cigarettes refer to all electronic smoking devices and tools and the like, whether or not they contain nicotine or tobacco.

The latest Cabinet decision on Excise Goods, Excise Tax Rates, and the Method of Calculating the Excise Price, issued in August 2019, expanded the scope of excise goods to include electronic smoking devices and liquids, and sweetened drinks.

The new decision goes into effect on 1st January 2020, adding these products to the list of Excise Goods, which included tobacco and tobacco products, energy drinks, and carbonated drinks – products that have been subject to Excise Tax since 1st October 2017.

Healthy Lifestyle

The FTA asserted that the new decision is part of the government’s continuous efforts to promote healthy lifestyles in the UAE community and curb the spread of diseases stemming from consumption of harmful goods.

Dubai Gazette