The United Arab Emirates (UAE) will introduce a tiered excise tax on sweetened drinks from early 2026 that links the levy to sugar content, the Federal Tax Authority (FTA) said, in a shift away from a fixed-rate structure and part of measures to influence consumption patterns in the Gulf state.
UAE tiered tax model to start in 2026
Under the new Tiered Volumetric Model, the excise charge will be calculated per litre based on the grams of sugar per 100 millilitres in each product. The more sugar a drink contains, the higher the rate applied.
The FTA advised producers, importers and stockpilers to review product formulations and sugar content now to prepare for the transition.
Sweetened drinks will be grouped as follows:
- High-sugar drinks: 8 grams or more of total sugar and other sweeteners per 100 millilitres
- Moderate-sugar drinks: 5 grams or more but less than 8 grams per 100 millilitres
- Low-sugar drinks: less than 5 grams per 100 millilitres
- Drinks containing only artificial sweeteners: taxed at 0 percent
Drinks that contain only naturally occurring sugars with no added sugar or sweeteners will not be subject to excise tax. Carbonated beverages will no longer be a standalone category and will be taxed according to sugar content.
Energy drinks will remain subject to a 100 percent excise tax under existing rules.
Registration and testing rules
Once the legislation takes effect, businesses that produce or import sweetened drinks will be required to register products as excise goods. Each producer must submit a certified laboratory report, accredited by the Ministry of Industry and Advanced Technology (MoIAT), confirming total sugar and sweetener content.
Companies can apply electronically for the UAE Certificate of Conformity regarding the sugar and sweetener content in beverages for excise tax purposes. Applications must be supported by test reports from laboratories accredited by MoIAT or certified to ISO or IEC 17025.
The FTA said that any beverage placed on the market without a valid certificate will be treated as high sugar by default until a certified report is provided.
Guidance and transition timeline
To support implementation, the FTA issued a Public Clarification in September 2025 titled โExcise Tax Public Clarification โ Transition to a tiered-volumetric model of Excise Tax for Sweetened Drinks.โ
The document outlines expected amendments to the mechanism for calculating excise on sweetened drinks, provides examples of calculations and sets out testing, certification and registration procedures. The clarification and related guidance are available on the FTA website.
