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The UAE has introduced a new mechanism for calculating excise tax on sweetened drinks from January 1, shifting to a tiered-volumetric model that links tax rates directly to the sugar and sweetener content of beverages, the Federal Tax Authority (FTA) said.
Under the new model, the amount of excise tax imposed per litre of a sweetened drink will depend on the total quantity of sugar and other sweeteners per 100 millilitres of the product.
The mechanism is set out under 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 in line with amendments to Federal Decree-Law No 7 of 2025 on Excise Tax.
The FTA said the decision forms part of ongoing efforts to develop a safe and healthy society by reducing the consumption of harmful goods and limiting the social and economic impacts associated with non-communicable diseases linked to unhealthy consumption patterns.
As part of preparations for implementation, the authority has launched a new service through its EmaraTax digital platform for registering sweetened drinks under the tiered-volumetric calculation mechanism.
The service replaces the current fixed-rate excise tax calculation method and uses artificial intelligence to streamline the registration process.
From January 1, all producers, importers and stockpilers of sweetened drinks will be required to obtain an “Emirates Conformity Certificate for Sugar and Sweeteners Content in Beverages (for Excise Tax purposes)” through the Ministry of Industry and Advanced Technology.
The certificate will be issued following laboratory testing conducted by accredited laboratories listed by the National Accreditation Department and the Emirates International Accreditation Centre.
The certificate must be submitted to the FTA when registering or updating beverage products on the EmaraTax platform. The authority said beverages will be classified as high-sugar sweetened drinks if the certificate is not submitted, until laboratory results confirm sugar levels below the prescribed threshold.
The FTA said it has implemented a comprehensive early-awareness plan for the new mechanism and issued a public clarification in September 2025, outlining the key features of the amendments to the application of excise tax on sweetened drinks.
Excise tax on sweetened drinks to be calculated on the following:
Under the new model, excise tax will be calculated based on the total content of sugar, including natural sugar, added sugar and artificial or other sweeteners, where a product contains added sugar or sweeteners such as honey.
The tax will apply to ready-to-drink beverages as well as concentrates, powders, gels, extracts and other forms that can be converted into sweetened drinks.
Beverages containing only natural sugar, with no added sugar or other sweeteners, will not be subject to excise tax.
For products that are not ready to drink, such as powders and extracts, producers will be required to provide information on sugar content and serving size based on preparation instructions stated on product labels, to avoid suspension of product registration that could affect import procedures.
Here’s how carbonated drinks will be impacted
The authority said carbonated drinks will no longer be classified as a separate category of excise goods under the new mechanism. Instead, their tax treatment will depend on sugar and sweetener content and whether they meet the definition of sweetened drinks.
Energy drinks will remain subject to excise tax at a rate of 100 per cent of the excise price under the current calculation method and will not fall under the tiered-volumetric model.
Under the new system, sweetened drinks will be classified into four categories. High-sugar sweetened drinks, containing 8 grams or more of total sugar and other sweeteners per 100 millilitres, will be subject to an excise tax of Dhs1.09 per litre.
Moderate-sugar sweetened drinks, containing 5 grams or more and less than 8 grams per 100 millilitres, will be taxed at Dhs0.79 per litre.
Low-sugar sweetened drinks, containing less than 5 grams per 100 millilitres, and artificially sweetened drinks containing only artificial sweeteners or artificial sweeteners with less than 5 grams of sugar per 100 millilitres, will be taxed at zero dirhams per litre.
Read: Saudi Arabia announces new sugar tax for soft drinks and sweetened beverages
