The UAE will introduce a new method of calculating the Tax on sugary drinks from 1 January 2026, moving from a fixed rate system to a “tiered-volumetric model” based on sugar that links the tax paid per liter to sugar and sweetened beverages.
This change was approved under the Cabinet decision No. 197 of 2025 on Commodities, Tax Rates or Value Set on Taxable Goods, and Methods of Calculating the Price of Goods, which comes into effect in accordance with the amendments to the Constitution No. 7 of 2025 on Excise Tax.
The Federal Tax Authority (FTA) said this new decision is part of national efforts to support the development of a safe and healthy society by reducing the use of dangerous products and reducing the social and economic costs of non-communicable diseases related to food habits.
UAE sugar tax
As part of the early preparations, the FTA launched a new service on its EmaraTax digital tax services platform that allows manufacturers, importers and importers to register sugary drinks in accordance with the new tiered-volumetric calculation model.
The authority said the service replaces the existing Fixed Excise Tax system and uses artificial intelligence technology to improve speed, efficiency and customer experience.
From 1 January 2026, all manufacturers, importers and collectors of sugary drinks must obtain the Emirates Certificate of Compliance for Sugar and Sugar Content in Beverages (for Excise purposes) through the official website of the Ministry of Industry and Advanced Technology.
The certificate must be issued following laboratory testing by an accredited laboratory listed by the Department of National Accreditation or the Emirates International Accreditation Centre. Once received, it must be submitted to the FTA when registering or revising beverage products through EmaraTax.
The FTA has warned that failure to submit the mandatory certificate will result in the product being classified as a high-sugar drink until laboratory evidence proves otherwise.
Under the new system, Excise Duty will be calculated based on the amount of sugar and sweetener, including natural sugar, added sugar and artificial sweeteners, where there is added sugar or sweetener.
Carbonated and energy drinks
The rules apply to ready-to-drink beverages as well as concentrates, powders, gels, extracts and other forms that can be converted into sweetened beverages. Beverages that contain only natural sugar with no added sugar or sweeteners will not be subject to Customs Duty in the UAE.
For non-drinkable products, businesses must provide sugar content data and size information based on the preparation instructions on the product label to avoid suspension of registration and possible disruptions in exports.
With the new system, carbonated beverages will no longer be treated as an independent category of Excise Goods. Instead, their tax treatment will depend on sugar and sweetener content.
Energy drinks will remain subject to Excise Duty at 100 percent of the retail price under the existing calculation method and will not be subject to the tiered-volumetric model.
Four tax categories and rates
The FTA has confirmed that sugary drinks will be divided into four categories:
- Drinks with a lot of sugar: They contain 8g or more of total sugar and sweeteners per 100ml
Excise Duty: AED 1.09 a liter ($0.30) - Moderately sweetened beverages: Contains 5g or more and less than 8g per 100ml
Excise Duty: AED 0.79 per liter ($0.22) - Low sugar drinks: Contains less than 5g per 100ml
Excise Duty: AED 0 per liter ($0) - Artificially sweetened beverages: They contain only artificial sweeteners or less than 5g of sugar per 100ml
Excise Duty: AED 0 per liter ($0)
Advance guidance
The UAEFTA said it has issued public explanations and detailed guidelines in recent months to ensure businesses are prepared for the change, including technical explanations on how sugar content is calculated and how products are classified under the new system.
