UAE approves new excise tax policy on sweetened drinks, sees high corporate tax compliance

Dubai: The Federal Tax Authority (FTA) Board approved new operational policies for calculating excise tax on sweetened drinks and reviewed the results of the UAE’s corporate tax rollout, which recorded one of the highest compliance rates globally.

The FTA confirmed that electronic systems and awareness campaigns are being developed to ensure a smooth transition before implementation of the new tiered volumetric model, which will link the tax rate directly to the sugar content of each beverage — a move aimed at encouraging lower sugar consumption and promoting public health.

Sheikh Maktoum bin Mohammed bin Rashid Al Maktoum, First Deputy Ruler of Dubai, Deputy Prime Minister and Minister of Finance, and Chairman of the FTA, chaired the latest Board meeting and said the UAE’s tax system has achieved major milestones in recent years, “further consolidating its role in supporting financial sustainability and enhancing the country’s global competitiveness.”

The Board reviewed a detailed report on the implementation of corporate tax, which showed that the number of registrants surpassed 651,000 by the end of September.

The FTA attributed this strong response to the efficiency of the ‘EmaraTax’ digital platform, which processes thousands of submissions daily and enables smooth filing and payment processes even during peak periods.

The report also noted significant growth in compliance with tax returns, annual declarations, and timely payments, supported by nationwide awareness campaigns that provided clear guidance to businesses.

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The FTA also approved Dh115.4 million in VAT refunds to UAE citizens for newly built homes during August and September.

Sheikh Maktoum reviewed updates on the joint E-Invoicing Project by the Ministry of Finance and the FTA, including legislative progress and system readiness. The Board also endorsed the FTA’s 2026 budget and approved several resolutions related to operational and policy enhancements.

His Highness directed the Authority to continue advancing digital transformation under the ‘Zero Digital Bureaucracy’ initiative to streamline processes, enhance customer experience, and strengthen the UAE’s global standing in tax administration.

He further emphasised the importance of sustaining momentum in modernisation and service excellence, ensuring the FTA continues to support financial sustainability and the country’s long-term economic growth.