The Ministry of Finance has announced Cabinet Decision No. (197) of 2025, which introduces a tiered volumetric model for excise tax on sweetened beverages in the United Arab Emirates.
The decision will replace Cabinet Resolution No. (52) of 2019 on Excise Goods and their tax rates, along with its amendments, the Emirates News Agency (WAM) reported.
Under the system, beverages containing 5 grams or more but less than 8 grams of sugar per 100 millilitres will be taxed at AED0.79 per litre.
UAE excise tax changes: Sweetened drinks to be taxed based on sugar content
Beverages containing 8 grams or more of sugar per 100 millilitres will be subject to a tax of AED1.09 per litre.
Beverages with less than 5 grams of sugar per 100 millilitres will be exempt from taxation. Those containing only artificial sweeteners will also be exempt.
The amendments will take effect for all taxable persons on January 1, 2026.
The resolution outlines the Federal Tax Authority’s procedures for classifying products, including their addition to the price list. It also details steps to be taken when taxable persons fail to submit laboratory reports or documentation.
In cases where reports are not submitted, the tax shall be applied according to the highest sugar content category. This may be revised upon submission of an approved laboratory report.
UAE excise tax amendment targets sweetened drinks in public health push
The amendment forms part of the UAE’s efforts to promote public health and encourage consumption habits across the community, in line with amendments to Federal Decree-Law No. (7) of 2025 on Excise Tax.
The Ministry of Finance stated that the amendments “align with the government’s commitment to promoting public health and reducing the financial burdens associated with diseases linked to excessive sugar consumption, while also establishing a clear and unified framework for the application of the excise tax, one that supports both consumers and investors.”
The decision aims to establish a framework that defines excise goods and their tax rates and values, making it easier for taxable persons to understand, comply with, and fulfil their obligations.
