The Federal Tax Authority has revealed that fresh, unpackaged and pre-packaged sweetened beverages will not be subject to selective tax as of January 1, 2020.

In response to Emirates Today's inquiries, the TRA explained that fresh, unpackaged and pre-closed sweetened beverages sold, for example, in restaurants and cafeterias, cannot be considered as “sweetened beverages”, as they are not ready-to-drink at all for the purpose of eating as a drink. Closed, packaged and non-fresh sweetened beverages sold at outlets, cooperatives, etc., are considered ready-to-drink products for drinking and are subject to selective tax.

She pointed out «Federal Taxes» that excludes from the definition of "sweetened beverages" any drink containing milk or milk substitutes at least 75% of the content of the drink ready to drink, pointing out that the decision to select a 50% selective tax on drinks sweetened with added sugar, applied to “Sweetened beverages”, which include any product added to a source of sugar or other sweeteners, is produced as a ready-to-drink product for consumption as a drink, concentrates, powders, gel, extracts, or any form that can be converted into a sweetener.

The Authority stated that «sugar» includes any type of sugar specified in accordance with the standard specification No. (148) according to the GCC Standardization Organization (GSO) under the title «sugar», and any subsequent and related standards, while «sweeteners» include any kind of sweeteners Specified in accordance with Standard No. (995) according to the GCC Standardization Organization under the title “Sweeteners Permitted for Use in Foodstuffs” and any subsequent and relevant Standards.

The Authority noted that it has started to receive registration requests from producers, importers and stores of sweetened beverages, as well as requests for the registration of sweetened beverages themselves, within the framework of the executive procedures of the Council of Ministers Resolution No. (52) of 2019 on «selective goods and tax rates imposed on them and how to calculate the selective price» In August 2019, the scope of selective tax goods was expanded to include sweetened beverages, noting that it was also open to register the rest of the goods covered by the resolution, including electronic smoking appliances and liquids. Used, and the registration of producers, importers and stockpiles of these goods.

The definition of “sweetened beverages” excludes any beverage containing at least 75% milk or milk substitutes.