UAE Federal Tax Authority Updates Excise Tax Compliance with Decisions No. 10 & 11 of 2025 

On 12 December 2025, the UAE Federal Tax Authority (FTA) issued Decisions No. 10 and 11 of 2025, introducing updated rules for excise tax compliance. These decisions aim to provide clarity on the taxation of sugar-sweetened products and the process for claiming deductions on excise tax paid, effective from 1 January 2026. 

What the Decisions Cover: 

• Decision No. 10 of 2025: Establishes a standardized mechanism for calculating the percentage of sugar and other sweeteners in concentrated products—powders, gels, extracts, and concentrates—where no guidelines exist or previous guidelines were inaccurate. 
• Decision No. 11 of 2025: Defines additional cases where excise tax paid may be deducted and sets out detailed controls and documentation requirements for claiming these deductions. 

Key Features of Decision No. 10 – Sugar & Sweeteners Calculation: 

• Laboratory Reports: Taxable persons must obtain reports from accredited labs showing the total sugar and sweetener content in concentrated products. 
• Dilution Ratio: The final drink volume and dilution ratio are calculated to determine the excise classification.
• Categorization of Products: 
  • Low-Sugar Category: <5g sugar/100ml. 
  • Artificially Sweetened Category: Products containing only artificial sweeteners. 

Key Features of Decision No. 11 – Excise Tax Deduction: 

• Eligible Deductions Include:
  • Excise tax on goods removed from designated zones for inspection to determine natural shortage. 
  • Excess tax paid on sweetened drinks that are reclassified based on lab results from High-Sugar to a lower category or non-taxable.
• Controls and Documentation: 
  • Evidence from independent competent entities or accredited labs is required. 
  • Documentation proving that the goods were not sold before claiming the deduction must be retained. 

Why This Matters for Businesses: 

For UAE businesses dealing with excise goods, these decisions:

• Provide a clear framework for sugar and sweetener calculations in concentrated products. 
• Enable accurate classification and taxation of sweetened drinks. 
• Offer a mechanism to reclaim excess excise tax paid, reducing financial risk. 
• Emphasize the importance of lab testing and proper documentation for compliance.

Next Steps for Businesses: 

• Review current product lines and classify products according to the new rules. 
• Ensure laboratory testing of concentrated products is performed by accredited labs. 
• Update internal processes for recording, reporting, and claiming excise tax deductions. 
• Train accounting and tax teams on documentation requirements to avoid penalties. 

Conclusion

Decisions No. 10 and 11 of 2025 represent a major step in refining excise tax compliance in the UAE. By proactively adapting to these updates, businesses can ensure accurate tax calculation, proper classification of sugar-sweetened products, and lawful recovery of any overpaid excise tax—positioning themselves for smooth operations under the new framework. 

Disclaimer: The Content offer general guidance and should not be considered legal, financial, or tax advice. Consult qualified professionals for personalized guidance. While efforts have been made to ensure accuracy, no guarantee is provided for completeness or applicability to individual situations. Users are responsible for their interpretation and actions based on this information, at their own risk.

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