UAE Cabinet Announces Updated List of Products Exempted from New Tax Laws

The Federal Tax Authority (FTA) has identified what sweetened beverages are exempted from the new tax laws in the country.

Earlier this month, the UAE Cabinet has imposed a new regulation, which limits the use and sale of cigarettes in the country without digital stamps, in its bid to ensure that all related products are well-regulated and accounted for by the government.

UAE Cabinet Announces Updated List of Products Exempted from New Tax Laws
Credits: FTA

FTA Identifies Product Exemptions from New UAE ‘Sin Tax’

In a report shared by WAM, those included in the exemption are ready-to-drink beverages containing at least 75 percent milk, ready-to-drink beverages containing 75 percent milk substitutes, baby formula or baby food, beverages consumed for special dietary needs, and beverages consumed for medical uses.

The authority has specifically indicated that beverages consumed for special dietary needs are those determined under Standard 654 of the GCC Standardisation Organisation under the heading “General Requirements for Pre-packaged Foods for Special Dietary Use.”

Products consumed for medical uses are those classified under Standard 1366 of the GCC Standardisation Organisation under the heading “General Requirements for Handling of Foods for Special Medical Purposes.”

The clarification was made in the decision announced last week by the UAE Cabinet on the expanded list of excise taxable products to include sweetened beverages, sugary drinks, and electronic smoking devices, starting January 1, 2020.

Furthermore, the decision also defines sweetened drinks as any product to which a source of sugar or sweetener is added and is produced as either a ready-to-go drink beverage or as concentrates, gels, powders, extracts, or any other form that can be converted into a sweetened drink.

According to the press statement shared by the FTA last August 24, the authority asserted that the new decision is part of the government’s continuous efforts to encourage a healthy lifestyle in the UAE community and to prevent the spread of diseases stemming from the consumption of harmful goods.

Of note, tax on e-liquids under the new decision will include all liquids used in electronic smoking devices and tools, whether or not these contain tobacco or nicotine. This rule applies to e-cigarettes, as well.

In line with this, the FTA urged all businesses including producers, importers, and stockpilers dealing with sweetened drinks to begin registering for excise tax purposes and to register their products within FTA’s new system as part of the first phase of registration, which was put into effect on August 18.

The FTA will announce the succeeding phases of the registration which will cover electronic smoking devices and liquids used in these devices.

The said initiative was established to curb the consumption of products that pose some threat to the health and well-being of the people in the country in order to promote wellness as well as happiness which are in line with the leadership’s Vision 2021 goals.