The Dubai Refreshments factory at Al Quoz. It produces three out of the top four beverages in the region. Image Credit: Ahmed Ramzan/ Gulf News

Dubai: Dubai’s tax resolution committee has ruled in favour of Dubai Refreshments, the Dubai-based distributor of Pepsi, in a dispute over how much tax it owed the government.

The Federal Tax Authority contended that Dubai Refreshments owed it Dh20.8 million, levied by the government office on the inventory of soft drinks held by the company on October 1, 2017, according to a statement from the company to the Dubai Financial Market (DFM), where its shares are traded.

October 1 was the date that a 50 per cent excise tax was introduced on sugary soft drinks.

Instead, the UAE’s Tax Dispute Settlement Committee (TDSC) found that Dubai Refreshments only owed Dh8.8 million in taxes, rejecting the FTA’s claim and ordering it to repay the company the extra Dh11.9 million.

In its statement on the bourse, Dubai Refreshments noted that the ruling could be appealed “before the competent courts following the procedures and laws of the country.”

In response to this, the company said it was “currently reviewing the ruling and the available options of action in accordance to the applicable laws and regulations.”

The ruling reflected the UAE’s commitment to the rule of law and access to justice, according to Mahmoud Abuwasel, the co-founding partner of law firm Bin Nakhira & Partners, who have represented clients in tax disputes exceeding one billion dirhams.

“This ruling shows that where the taxable person pays the due tax and penalties before resorting to the TDSC, or the courts…the TDSC will study the matter in earnest and grant the taxable person remedy where possible,” Abuwasel told Gulf News.

“This ruling is an excellent reflection of the UAE’s paramount adhesion to the rule of law and access to justice.”