G/MA/W/140  
 
27 September 2018  
(18-5959) Page: 1/3 
Committee on Market Access  Original: English  
 
 QUESTIONS FROM SWITZ ERLAND TO THE KINGDOM OF BAHRAIN, TO 
THE KINGDOM OF SAUDI ARABIA AND TO THE UNITED ARAB EMIR ATES  
REGARDING THE LEGISLATION ON T HE SELECTIVE TAX  
COMMUNICATION FROM S WITZERLAND  
 
The following communication, dated 20 September 2018, is being circulated at the request of the 
delegation of Switzerland.  
 
_______________  
 
 
1  QUESTION FROM SWITZE RLAND TO THE KINGDOM OF BAHRAIN  
The Excise Tax Treaty for the Cooperation Council for the Arab States of the Gulf forms the common 
framework for the in troduction of excise tax across all six Member States. The treaty constitutes the 
basis of national Excise Tax legislations by each GCC Member State. Based on this Treaty the 
Kingdom of Bahrain has adopted Law number (40) for the year 2017 regarding the Ex cise tax1, a 
Ministerial Order No (19) for the year 2017 for issuing the implementation regulations for the law 
number (40) regarding the Excise tax2. The Excise Tax Treaty introduced a selective tax on goods, 
which are “goods that are deemed harmful to hu man health and to the environment.”3 
 
Energy drinks and carbonated soft drinks are among the goods subject to the excise tax. According 
to the Bahraini legislation, currently the tax rate for energy drinks is set at 100% of the retail sales 
price and the o ne for carbonated soft drinks is set at 50% of the retail sales price.  
 
Switzerland would like to ask the Kingdom of Bahrain to clarify the following aspects:  
 
1. Could Bahrain provide the scientific basis (studies, reports and other relevant material) use d 
to determine the level of the selective tax for energy drinks and carbonated soft drinks?  
 
2.  Could Bahrain provide the detailed calculation used to determine the level of the tax in the 
case of energy drinks and in the case of carbonated soft drinks?  
 
3.  Could Bahrain provide an exhaustive list of all ingredients contained in energy drinks that are 
deemed to be harmful to human health and provide all relevant scientific evidence for such 
an assessment?  
 
4. Could Bahrain provide an exhaustive list of al l ingredients contained in carbonated soft drinks 
that are deemed to be harmful to human health and provide all relevant scientific evidence 
for such an assessment?  
 
                                                
1 https://www.mof.gov.bh/Files/cdoc/FI686 -الانتقائية20%الضريبة20%بشأن20)%40(20%رقم20%قانونpdf 
2 https://www.mof.gov.bh/Files/cdoc/FI706 -
بش20%202017 %لسنة20)%40(20%رقم20%للقانون20%التنفيذية20%اللائحة20%باصدار20%202017%لسنة20)%17(20%رقم20%قرار
الانتقائية20%الضريبة20%أنpdf 
Published by the General Authority of Zakat and Tax Official website at 6 June 2017  (unofficial English 
translation) . 
3 Article 3  :1 of the Excise Ta x Treaty . G/MA/W/140  
 
- 2 - 
 
  5.  Could Bahrain confirm whether the following beverages are subject to the selective tax? Please 
indicate the level of the tax for these beverages and the rationale for imposing the tax  Ice 
tea, Sports drinks like Gatorade, fruit juices, fruit nectars, beer without alcohol, wine without 
alcohol . 
 
6. Does Bahrain, within the GCC framework, foresee to modify the selective tax in the coming 
months in order to follow the recommendations of the World Health Organization (a specific 
tax based on the vo lume or the ingredient content)4? Which other amendments  do you foresee 
(i.e. scope of the product coverage)?  
 
 
2  QUESTIONS FROM SWITZ ERLAND TO THE KINGDO M OF SAUDI ARABIA  
The Excise Tax Treaty for the Cooperation Council for the Arab States of the Gulf forms the common 
framework for the introduction of excise ta x across all six Member States. The treaty constitutes the 
basis of national Excise Tax legislations by each GCC Member State. Based on this Treaty the 
Kingdom of Saudi Arabia has adopted an Excise Tax Law5, the Excise Tax Implementing Regulation6 
and the Executive Regulation of Selective Tax Law7. The Excise Tax Treaty introduced a selective 
tax on goods, which are defined as “ goods that are deemed harmful to human health and to the 
environment. ”8 
 
Energy drinks and carbonated soft drinks are among the goo ds subject to the excise tax. According 
to the Saudi legislation, currently the tax rate for energy drinks is set at 100% of the retail sales 
price and the one for carbonated soft drinks is set at 50% of the retail sales price.  
 
Switzerland would like to a sk the Kingdom of Saudi Arabia to clarify the following aspects:  
 
1. Could Saudi Arabia provide the scientific basis (studies, reports and other relevant material) 
used to determine the level of the selective tax for energy drinks and carbonated soft drink s? 
 
2. Could Saudi Arabia provide the detailed calculation used to determine the level of the tax in 
the case of energy drinks and in the case of carbonated soft drinks?  
 
3. Could Saudi Arabia provide an exhaustive list of all ingredients contained in energy drinks that 
are deemed to be harmful to human health and provide all relevant scientific evidence for 
such an assessment?  
 
4. Could Saudi Arabia provide an exhaustive list of all ingredients contained in carbonated soft 
drinks that are deemed to be harmful to human health and provide all relevant scientific 
evidence for such an assessment?  
 
5. Could Saudi Arabia confirm whether the following beverages are subject to the selective tax? 
Please indicate the level of the tax for these beverages and the r ationale for imposing the tax.  
 
Ice tea, Sports drinks like Gatorade, fruit juices, fruit nectars, beer without alcohol, wine 
without alcohol  
 
6. Does Saudi Arabia, within the GCC framework, foresee to modify the selective tax in the 
coming months in order  to follow the recommendations of the World Health Organization (a 
specific tax based on the volume or the ingredient content) 9? Which other amendments do 
you foresee (i.e. scope of the product coverage)?  
  
                                                
4 WHO, Fiscal policies for diet and prevention of noncommunicable diseases, Technical meeting report, 
5-6 May 2015 . 
5 Published by the General Authority of Zakat and Tax on the official Saudi Gazette «  Um Al -Qura » at 
26 May 2017  (unofficial Engli sh translation).  
6 Published by the General Authority of Zakat and Tax Official website at 6 June 2017  (unofficial English 
translation).  
7 Issued under the Board of Directors Resolution No.9 -I-2017 (unofficial English translation).  
8 Article 3  :1 of the Ex cise Ta x Treaty . 
9 WHO, Fiscal policies for diet and prevention of noncommunicable diseases, Technical meeting report, 
5-6 May 2015.  G/MA/W/140  
 
- 3 - 
 
  3  QUESTIONS FROM SWITZ ERLAND TO THE UNITED  ARAB EM IRATES  
The Excise Tax Treaty for the Cooperation Council for the Arab States of the Gulf forms the common 
framework for the introduction of excise tax across all six Member States. The treaty constitutes the 
basis of national Excise Tax legislations by eac h GCC Member State. Based on this Treaty the United 
Arab Emirates (UAE) have adopted the Federal Decree -Law no (7) of 2017 on Excise Tax10, the 
Cabinet decision No (38) of 2017 on Excise Goods, Excise Tax Rates and the Method of Calculating 
the Excise Price11. The Excise Tax Treaty introduced a selective tax on goods, which are “ goods that 
are deemed harmful to human health and to the environment. ”12 
 
Energy drinks and carbonated soft drinks are among the goods subject to the excise tax. According 
to the UAE legislation, currently the tax rate for energy drinks is set at 100% of the retail sales price 
and the one for carbonated soft drinks is set at 50% of the retail sales price in principle.  
 
Switzerland would like to ask the UAE to clarify the following aspe cts: 
 
1. Could UAE provide the scientific basis (studies, reports and other relevant material) used to 
determine the level of the selective tax for energy drinks and carbonated soft drinks?  
 
2. Could UAE provide the detailed the calculation used to determi ne the level of the tax in the 
case of energy drinks and in the case of carbonated soft drinks?  
 
3. Could UAE provide an exhaustive list of all ingredients contained in energy drinks that are 
deemed to be harmful to human health and provide all relevant sc ientific evidence for such 
an assessment?  
 
4. Could UAE provide an exhaustive list of all ingredients contained in carbonated soft drinks that 
are deemed to be harmful to human health and provide all relevant scientific evidence for 
such an assessment?  
 
5. Could the UAE confirm whether the following beverages are subject to the selective tax?  
 
Ice tea, Sports drinks like Gatorade, fruit nectars, beer without alcohol, wine without alcohol  
 
6. Does the UAE, within the GCC framework, foresee to modify the sele ctive tax in the coming 
months in order to follow the recommendations of the World Health Organization (a specific 
tax based on the volume or the ingredient content) 13? Which other amendments do you 
foresee (i.e. scope of the product coverage)?  
 
 
__________  
                                                
10 unofficial English translation: Ministry of finance website: 
https://www.mof.gov.ae/en/lawsAndPolitics/govLaws/Documents/Federal%20Decree -
Law%20No.7%20of%202017%20on%20Excise%20Ta x.pdf 
11 unofficial English translation: Ministry of finance website:  
https:/ /www.mof.gov.ae/en/lawsAndPolitics/CabinetResolutions/Documents/Cabinet%20Decision%20No
%20(38)%20of%202017%20on%20Excise%20Goods,%20Rates%20and%20Excise.pdf  
12 Article 3  :1 of the Excise Ta x Treaty . 
13 WHO, Fiscal policies for diet and prevention of noncommu nicable diseases, Technical meeting report, 
5-6 May 2015.