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INSIGHTS
Paid Excise Tax Already? Here’s When You Can Deduct It — And How to Stay Compliant Under FTA Decision No. 11 of 2025
Many businesses treat Excise Tax as a final, non-recoverable cost. But that’s not always true. The UAE Federal Tax Authority issued FTA Decision No. 11 of 2025, which introduces additional cases where Excise Tax paid on Excise Goods may be deducted, along with clear deduction controls that businesses must follow.
Federal Decree-Law No. 8 of 2017 (Amended) — What UAE Businesses Need to Know About VAT
Many businesses think VAT compliance means submitting VAT returns on time. But the UAE’s main VAT law — Federal Decree-Law No. 8 of 2017 (as amended) — makes it clear that VAT compliance comes down to one question: Can you prove your VAT position with correct invoices, correct records, and correct
Summary: The Federal Tax Authority allows specific administrative exceptions to help businesses manage VAT obligations efficiently. The Dec 2025 VATGEX1 guide clarifies what’s allowed and how to apply. Highlights: Scope: Exceptions only apply to invoices, credit notes, export evidence, and export timelines. Common Errors to Avoid: Wrong category, incomplete documents,
Certain products are exempt from the new calculation mechanism. Points of Alignment: Low-sugar category: <5g sugar per 100ml — automatically classified as low-sugar. Artificially sweetened category: Drinks containing only artificial sweeteners. Effective date: 1 Jan 2026. All taxable persons must comply from this date. conclusion Not all drinks are taxed
VAT administrative exceptions let eligible businesses comply efficiently without breaching the law. The FTA’s VATGEX1 guide (Dec 2025) details the process, eligible cases, and submission rules. Key Takeaways: Eligible Cases: Tax Invoices, Credit Notes, Export Evidence, Export Period extensions Who Can Apply: Registrants, Tax Agents, or Legal Representatives Submission Process:
The Decision clarifies how to account for dilution and compute excise obligations accurately. Points of Alignment: Dilution Ratio Formula: Dilution Ratio = volume of final drink ÷ volume/weight of concentrated unit. Ensures fair taxation whether a concentrate is highly concentrated or lightly diluted. Accurate dilution ratio reporting is essential to
The FTA has introduced a precise mechanism for measuring sugar and sweeteners when existing guidelines are missing or inaccurate. Points of Alignment: Taxable persons must obtain a laboratory report showing the total sugar and sweetener content per unit. Final drink volume formula: Volume of final drink = total sugar/sweeteners (g)
Tax Tech or Tax Certainty? UAE Introduces Advance Pricing Agreements
The UAE FTA has released a comprehensive Corporate Tax Guide on Advance Pricing Agreements (APAs), marking a major step for transfer pricing certainty and corporate tax planning under the UAE Corporate Tax regime. What’s an APA and why it matters now Advance Pricing Agreements (APAs) are formal arrangements between a
The UAE’s FTA has clarified which products are subject to sugar and sweetener excise rules under Decision No. 10 of 2025. Points of Alignment: Sweetened Drink includes any product with added sugar, artificial sweeteners, or other sweeteners, whether ready-to-drink, concentrate, powder, gel, or extract. Concentrated Products refer to powders, gels,
Lab Tests or Top Tier Tax — The New Reality Under the new excise framework, every sweetened drink must be supported by a lab report if it is to benefit from the lower tax tiers — otherwise, the highest tax rate applies. A report from an accredited UAE laboratory must
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