Lesson 3 — Classifying products
Classification is your obligation, not the software's, and it has an evidential dimension that catches people out. The FTA may require documents, laboratory tests or other evidence to support how you have classified a drink. Where you cannot produce a laboratory report that the FTA accepts, the drink is taxed at the highest sugar category — not at the band you believe it belongs in. Source: Cabinet Decision 197/2025, Art. 13.
The click path. On a product, open the Excise tab. There are four things to set, and the module's defaults are deliberately inert until you do.
| Field | What it does | What to enter |
|---|---|---|
| Excise Good | Brings the product into excise scope at all | Tick it for any of the five goods in Article 2 |
| Excise Category | Decides the mechanic — ad valorem, volumetric or tiered | The category matching the good, from Lesson 4 |
| Net Volume (L) | The litres one unit represents | The net volume of the container, in litres |
| Sugar (g/100ml) | The figure that selects the band | Total sugar per 100 ml of the drink as consumed |
Naturally occurring sugar counts, and this is the classification error we see most. Where a drink contains added sugar or other sweeteners, the naturally occurring sugar counts toward the total. So a juice drink carrying 4.1 g per 100 ml of naturally occurring fruit sugar plus 2.3 g per 100 ml of added sugar has a total of 6.4 g per 100 ml. It is in the middle band at AED 0.79 per litre, and 6.4 is what belongs in Sugar (g/100ml) — not 2.3. Record only the added sugar and the product falls into the first band and computes to nothing, which looks exactly like a correct exemption. Source: Cabinet Decision 197/2025, Art. 10(3).
Concentrates are measured after dilution. For concentrates, powders, gels and extracts, the tax is calculated on the final reconstituted product, so both figures you record are the reconstituted ones: the sugar concentration of the drink as it is actually consumed, and the litres the pack makes. A 1 litre bottle of Oasis Lime Cordial that dilutes one part to four makes 5 litres, and if the reconstituted drink carries 6.8 g per 100 ml it is in the middle band — so Net Volume (L) is 5, not 1, and the excise on one bottle is 5 × 0.79, which is AED 3.95. Where the label's dilution instruction is ambiguous, settle it before you configure the product, because it changes both the band and the litres. Source: Cabinet Decision 197/2025, Art. 10(2).
Some drinks are excluded from sweetened drinks altogether. Under Art. 7(5) the exclusions are:
- ready-to-drink beverages containing at least 75% milk;
- ready-to-drink beverages containing at least 75% milk substitutes;
- baby formula, follow-up formula and baby food;
- beverages consumed for special dietary needs, as defined in GSO 654;
- beverages consumed for medical use, as defined in GSO 1366;
- sweetened beverages prepared in restaurants and similar establishments and served in open, unsealed containers.
Drinks containing alcohol are excluded as well, under Art. 8. Read the last exclusion in the list carefully, because it is the one with an operational shape: it turns on the container and the setting, not on the recipe. The same syrup that is excluded when a barista pours it into an open cup is a sweetened drink when the same business bottles it, seals it and sells it from a chiller — and a food-service business that starts packaging its own drinks has just walked into excise scope without changing a single ingredient.
The failure mode: an unevidenced band. Do not set Sugar (g/100ml) from a rounded label claim, a supplier's email or a category assumption when you have no analysis to support it. Article 13 puts the consequence on you, and the consequence is the top band on the whole volume — for Marina Cola's 3,960.00 litres that is the difference between AED 4,316.40 and nothing at all if you had assumed the first band. Hold a laboratory report for every product whose band is not obvious, keep it with the product record, and re-test after any reformulation.