INSIGHTS

Introduction The UAE Federal Tax Authority (FTA) has introduced guidelines on Natural Shortage of Excise Goods within Designated Zones (DZ). These rules clarify how businesses can handle unavoidable losses of Excise Goods—such as moisture loss, evaporation, or residues—without being subject to Excise Tax, provided proper procedures are followed. The guidelines

What Is Cabinet Decision No. (197) of 2025? The decision introduces a tiered excise calculation for sweetened beverages based on sugar content per 100ml. New tax tiers: < 5g sugar / 100ml: 0 AED (0%) 5g to < 8g sugar / 100ml: 0.79 AED per liter 8g+ sugar / 100ml:

How Reformulation Solves Excise Tax Exposure Under the tiered excise model, reformulation becomes a measurable compliance solution Reducing sugar below 5g/100ml removes excise tax liability entirely Minor formulation adjustments can move products into lower tax tiers Per-liter tax reductions scale across production volumes, improving margins When supported by documentation, reformulation

From Flat Tax to Tiered Volumetric Model Previously, sweetened beverages were taxed at a flat 50% excise rate.The new framework introduces volume-based taxation linked to sugar density, making measurement accuracy critical. This creates: Higher compliance risk Greater documentation requirements Increased FTA scrutiny Who Is Most Affected? Beverage manufacturers Importers and

Excise Tax compliance is becoming more technical in the UAE, and businesses are expected to maintain stronger controls around pricing, product category, calculations, and evidence — not just filing returns. Below is a practical checklist to help you spot gaps before they become expensive. Common Excise Compliance Requirements: 1) Correct

Many businesses focus on which products are subject to Excise Tax — but far fewer pay enough attention to how the Excise Price is calculated. That’s where risk (and unexpected tax exposure) often begins. A UAE Excise Tax update issued in Q4 2025 refreshes the rules on Excise Goods, applicable