As part of its ongoing efforts to enhance the legislative framework in a manner that strengthens the efficiency of the tax system and ensures its alignment with global best practices and the unified directives of the Gulf Cooperation Council (GCC), the UAE Ministry of Finance has announced the completion of a set of proposed legislative amendments to embed the updated excise tax policy into the national legislation. This step is in line with the GCC’s adoption of a tiered volumetric model for excise tax on sugar-sweetened beverages (SSBs). The amendments aim to establish a comprehensive legal and regulatory foundation that ensures the smooth implementation of the updated policy at the national level, with effect from 1 January 2026. The Ministry noted that the proposed amendments are designed to foster a competitive tax environment by introducing a legislative framework that enables effective and integrated implementation of the new model, while it also takes into account the implications that may arise during the transitional period. The amendments include setting the various levels of a tiered volumetric model based on sugar content or other sweeteners for sweetened beverages, and introducing a clear mechanism that enables taxable persons who have imported or produced goods subject to a 50% excise tax prior to the amendments coming into effect, and whose tax liability decreased as a result of these amendments (before selling the goods for which tax was previously paid), to deduct part of the previously paid tax. The Ministry affirmed that the amendments reflect the UAE’s commitment to updating its financial system through a flexible and proactive approach that supports economic stability, strengthens trust with taxpayers, and contributes to achieving the country’s fiscal and public health sustainability objectives.
