Saudi Gazette report

RIYADH — The Financial and Economic Cooperation Committee of the Gulf Cooperation Council (GCC) has decided to revise the methodology for calculating selective tax on sweetened beverages. The revised tax will come into force in Saudi Arabia from 1 January 2026.

Under the new tiered volumetric approach, the tax will be assessed according to graded bands determined by the total amount of sugar per 100 milliliters of ready-to-drink sweetened beverages falling within each bracket. This replaces the current flat-rate system, which imposes a fixed 50 percent selective tax on the retail price of sweetened beverages subject to the tax.

In line with this decision, the Zakat, Tax and Customs Authority (ZATCA) published proposed amendments to the Implementing Regulations of Excise Goods Tax Law on the Public Consultation Platform Istitlaa. The amendments outline the tax provisions for transitioning to the new volumetric model, following approval by ZATCA’s board of directors to open the consultation process. The public is invited to share feedback and suggestions by October 23.

Sweetened beverages are defined as any products containing added sources of sugar, artificial sweeteners, or other sweetening agents produced for consumption as drinks. The excise tax applies to all forms of beverages, whether ready-to-drink or in the form of concentrates, powders, gels, extracts, or any other product that can be converted into a beverage.

The implementation of the new methodology across GCC member states follows the committee’s resolution to modify the mechanism for calculating excise tax on sweetened beverages. In Saudi Arabia, the new system is scheduled to take effect from the beginning of 2026, once all necessary legislative and regulatory requirements are finalized and details are published.

The announcement of the revised methodology aligns with ZATCA’s keenness to provide importers and manufacturers sufficient lead time to prepare for the implementation. The authority stated that awareness workshops will be held in coordination with relevant entities to explain the technical aspects of the new system and ensure a smooth and well-informed transition.