The UAE will implement a new ‘Tiered-Volumetric Model’ for calculating Excise Tax on sweetened drinks starting 1 January 2026, linking the tax per liter to the total sugar and sweetener content per 100 ml.
The decision has been taken is in accordance with Cabinet Decision No. 197 of 2025 on Excise Goods, Tax Rates or Amounts Imposed on Excise Goods, and the Methods of Calculating the Excise Price, which will enter into force as of 1 January 2026, in line with the latest amendments to Federal Decree-Law No. 7 of 2025 on Excise Tax.
The Federal Tax Authority said the new decision supports national efforts to promote a healthier society by reducing the consumption of harmful products. As part of early preparations, the FTA has launched a new AI-enabled service on the EmaraTax platform to register sweetened drinks under the tiered-volumetric model for excise tax, replacing the fixed-rate method and enhancing efficiency and customer experience.
The FTA said that from 1 January 2026, producers, importers, and stockpilers of sweetened drinks must obtain an Emirates Conformity Certificate for sugar and sweetener content from the Ministry of Industry and Advanced Technology, based on tests conducted by accredited UAE laboratories, and submit it to the FTA when registering or updating products on the EmaraTax platform.
The authority warned that if the mandatory certificate is not obtained and submitted during registration, the beverage will be classified as a ‘High Sugar’ sweetened drink until laboratory results confirm a lower sugar content.
The Federal Tax Authority has implemented an early awareness plan for the new mechanism, issuing a public clarification in September on the transition to the tiered-volumetric model for sweetened drinks. Detailed, user-friendly guidance on the mechanism, its requirements, and sugar assessment methods, along with related legislation, is available on the FTA’s website.
Calculation of Excise Tax
The FTA confirmed that under the new mechanism, Excise Tax will be calculated based on the total sugar and sweetener content of sweetened drinks, including natural, added, and artificial sweeteners, whether the product is ready to drink or in concentrate, powder, gel, or extract form, while beverages containing only natural sugar with no added sweeteners will not be subject to tax.
It added that for non-ready-to-drink products, producers must provide details on sugar content and serving size as per label instructions to prevent registration suspension and potential import disruptions.
Rep. Image credits: freepik | Cropped by GBN
The FTA has confirmed that under the new mechanism, carbonated drinks will no longer be a separate excise category and will be taxed based on their sugar and sweetener content as sweetened drinks. Energy drinks, however, will continue to be taxed at 100 percent of the excise price under the current method and will not follow the tiered-volumetric model
The Federal Tax Authority clarified that under the new model, Excise Tax on sweetened drinks will be applied based on four categories:
High-sugar Sweetened Drinks: contain 8 grams or more of total sugar and other sweeteners per 100 ml and are subject to Excise Tax at a rate of $0.30 (AED 1.09) per litre.
Moderate-sugar Sweetened Drinks: contain 5 grams or more and less than 8 grams of total sugar and other sweeteners per 100 ml and are subject to Excise Tax at a rate of $0.22 (AED 0.79) per litre.
Low-sugar Sweetened Drinks: contain less than 5 grams of total sugar and other sweeteners per 100 ml and are subject to Excise Tax at a rate of $0.00 (AED 0) per litre.
Artificially Sweetened Drinks: contain only artificial sweeteners or artificial sweeteners with less than 5 grams of sugar or other sweeteners per 100 ml and are subject to Excise Tax at a rate of $0.00 (AED 0) per litre.
