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What you need to know now
The 2019 exclusion list is not a complete current classification guide. Beverage composition must be reviewed under the 2026 sweetened-drink model.
The original article is preserved below as a historical record. Earlier deadlines, rates, offers and approval statements should not be used as current guidance.
- Product descriptions alone are insufficient.
- Retain formulation and laboratory evidence.
- Confirm the current legislation before assigning a rate.
Classify the actual product
Excise treatment depends on the product and the current legal definitions, not only on a marketing name. Obtain the formulation, ingredients, pack size and intended use before deciding whether an exclusion applies. A drink described as healthy, milk-based or low sugar should not be classified solely from the label on the front of the pack. Keep the original 2019 article as historical background and review the current beverage framework separately.
Keep technical evidence with the classification
Create a product file that links the commercial SKU to the manufacturer’s specification, laboratory information where relevant and the tax classification used. Note whether the product is sold ready to drink or requires preparation, as the technical description matters when applying the relevant definitions. If a supplier changes the recipe, do not assume the prior conclusion remains valid. Ask for updated specifications and document who reviewed the effect on the tax treatment.
Review the 2026 sweetened-drinks model
The current framework for sweetened drinks uses a tiered volumetric approach rather than treating every product as subject to the former flat percentage. Review the current FTA material and legislation before assigning a rate to a SKU. This article deliberately does not reproduce an uncertain medium-tier figure from conflicting summaries. Confirm the applicable decision and the product evidence together, and retain that basis with the calculation used for registration, pricing and reporting.
Connect classification to business records
Once a treatment is supported, apply it consistently in product master data, purchasing, stock records and the relevant tax process. Reconcile product codes across customs, supplier and accounting records so the same drink is not classified differently in different systems. Escalate ambiguous products before accepting an unsupported exemption statement from a sales representative. A clear classification register helps explain both taxable products and exclusions without turning the old news list into an exhaustive current rule. A change-control record should identify the first shipment or batch affected by a revised specification so the accounting team can apply the reviewed treatment consistently.
YOUR NEXT STEPS
A practical way forward
- 01
Step 1
Identify ingredients and intended use.
- 02
Step 2
Assess whether the product falls within an exclusion or taxable category.
- 03
Step 3
Document the classification and update registration records.
CLEAR ANSWERS
Frequently asked questions
Is every milk-labelled drink excluded?
Do not assume so. Check the statutory product conditions.
Is every sweetened drink still subject to a flat 50%?
No. The 2026 framework uses a tiered volumetric model.
Read the original article First published 5 November 2019 · retained for context
This earlier article is preserved for context. Its rates, deadlines, approvals and announcements may have been superseded. Use the current guidance and official references on this page for your next step.
Goods exempt from excise tax in UAE : Good news – No excise tax on these products in UAE
Goods exempt from excise tax in UAE : The decision goes into effect on December 1
Curbing harmful consumption patterns and enhancing the standard of living are the leading objectives behind the Cabinet decision to expand the scope of excise tax, asserted Khalid Ali Al Bustani, Director-General of the Federal Tax Authority, FTA, at a media workshop organised by the authority.
Al Bustani explained that the expansion of excise tax answers directives from the UAE’s wise leadership to enhance the country’s competitiveness and expedite plans to build a safe, healthy community, by curbing the consumption of harmful products, diversifying sources of income, and expanding the public services offered by the government.
FTA officials attended the workshop, giving a detailed presentation about Cabinet Decision No. (52) of 2019 on excise goods, excise tax rates, and the methods of calculating the excise price. The decision goes into effect on December 1, 2019, expanding the list of goods subject to excise tax to include sweetened drinks, electronic smoking devices and tools, and the liquids used in these devices, which will be added to the items that have carried the tax since it first went into effect on October 1, 2017, namely, tobacco and tobacco products, energy drinks, and carbonated beverages.
Al Bustani said the products that would be exempt from the new decision include ready-to-drink beverages containing at least 75 per cent milk or milk substitutes, baby formula, follow-up formula, or baby food, beverages consumed for special dietary needs, and beverages consumed for medical uses.
Khalid Al Bustani drew attention to the significant improvement in compliance with excise tax returns requirements two years after the tax went into effect, revealing that the number of businesses registered with the FTA for Excise Tax has risen to 782. He urged businesses that are subject to Cabinet Decision No. (52) of 2019 to register in the FTA’s electronic system well ahead of December 1, 2019, noting that early registration helps them avoid violations and consequent obstacles they may face when importing Excise Goods.
“Since the Cabinet decision was issued in August 2019, the FTA rolled out a comprehensive plan to implement the decision,” he explained. “In August, the authority began implementing a comprehensive awareness campaign, holding workshops for all stakeholders involved in implementing the cabinet decision, in collaboration with the competent authorities around the country,” Al Bustani noted. adding that the sessions targeted businesses subject to excise tax as per the new decision, regardless of whether or not they have registered as such with the authority.
Courtesy : Khaleej Times
VERIFY THE DETAIL
Official sources & further reading
Source checks support this general guide. Your treatment depends on the facts, tax period and applicable legislation.
