The UAE will begin implementing a new Excise Tax mechanism on sweetened drinks from 1 January 2026, based on a “Tiered-Volumetric Model.”
The updated system links the amount of excise tax per litre directly to the sugar and sweetener content of beverages, replacing the current fixed-rate approach. The change is introduced under Cabinet Decision No. 197 of 2025 and aligns with amendments to the Federal Decree-Law on Excise Tax.
The Federal Tax Authority (FTA) explained that the new mechanism supports national efforts to promote public health by reducing the consumption of high-sugar products and limiting the long-term social and economic costs associated with non-communicable diseases. The model encourages manufacturers to lower sugar content while providing consumers with healthier beverage choices.
To support early implementation, the FTA has launched a new registration service on the EmaraTax digital platform, allowing producers, importers, and stockpilers to register sweetened drinks under the tiered system. The service uses artificial intelligence to ensure speed, accuracy, and efficiency.
From January 2026, businesses dealing with sweetened drinks must obtain an “Emirates Conformity Certificate for Sugar and Sweeteners Content in Beverages” from the Ministry of Industry and Advanced Technology. This requires laboratory testing from accredited UAE laboratories, after which the certificate must be submitted through EmaraTax. Products without the certificate will be temporarily classified as high-sugar drinks until verified otherwise.
Under the new model, Excise Tax will apply only to beverages containing added sugar or sweeteners, whether in ready-to-drink or concentrated forms. Drinks containing only natural sugar will be exempt. Carbonated drinks will no longer be taxed as a separate category and will instead be assessed based on sugar content. Energy drinks will remain taxed at 100 percent under the existing method.
Sweetened drinks will be classified into four categories: high-sugar, moderate-sugar, low-sugar, and artificially sweetened, with tax rates ranging from AED 1.09 per litre to zero. The FTA has published detailed guidance and awareness materials to ensure a smooth transition for businesses ahead of implementation.
News Source: Emirates News Agency
