03 Feb 2026
The UAE government has recently announced a major change to its excise tax system by Cabinet Decision No. 197 of 2025, introducing a layering of excise tax on sweetened drinks. This reform started on 1 January 2026 and calculated excise tax on sweetened beverages in the UAE based on sugar content per 100 milliliters.
This project is part of the UAE overall health and fiscal strategy. It will have a direct impact on beverage businesses in UAE, particularly manufacturers, importers, and distributors operating in Dubai.
This blog explains the new rules, key compliance requirements, and practical steps to follow, based on official guidance from the Federal Tax Authority (FTA) and the Ministry of Finance.
What Is the New Excise Tax on Sweetened Drinks in UAE?
The new excise tax on sweetened drinks in the UAE, which came into effect on 1 January 2026, was set by Cabinet Decision No. 197 of 2025, replacing Cabinet Resolution No. 52 of 2019.
It introduces a tiered excise tax UAE based on sugar and sweetener content per 100 ml, under the new excise tax rules 2026, replacing the previous value-based tax system. The rules also clarify product classification and FTA compliance requirements, including laboratory reports and product registration.
Objectives of the Sweetened Beverage Tax in the UAE
The sweetened beverage tax UAE has been introduced to achieve the following objectives:
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Support public health objectives by discouraging excessive sugar consumption.
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Change consumer preferences and production by connecting the tax rates to the amount of sugar present in a product.
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Provide a more detailed and structured framework in regulatory terms.
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Enable businesses to assess their potential tax exposure more accurately.
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Allow businesses to take informed decisions on pricing, reformulation, and product strategy in line with the UAE tax regulations 2026.
Tiered Volumetric Model for Excise Tax on Sweetened Beverages in UAE
Which Businesses Are Affected by the UAE Sugar Tax 2026?
The excise tax on sweetened drinks UAE applies broadly and affects multiple types of businesses, including:
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Producers / Manufacturers: Must register sweetened drinks as excise goods and submit a certified conformity certificate.
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Importers: Must provide conformity certificates and laboratory test results when registering sweetened drinks.
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Stockpilers / Distributors: Required to obtain the Emirates Conformity Certificate and register their stocks under the new tiered excise tax model.
Any entity involved in handling taxable drinks must comply with the updated requirements under the UAE sugar tax 2026.
Excise Tax Rates for Sweetened Beverages UAE
The excise tax rates for sweetened beverages UAE are now determined based on sugar content per 100 ml under the tiered excise tax UAE system, as confirmed by the Federal Tax Authority (FTA). The new tiered excise tax rules 2026 replace the previous flat-rate model, ensuring higher sugar levels attract higher tax rates.
Tax Calculation Based on Sugar Content per 100 ml
Note: Artificial sweeteners are defined according to GCC Standard No. 995, issued by the GCC Standardization Organization (GSO).
Businesses can use this transition period to:
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Review product compositions / sugar content classification
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Model tax exposure for different sugar levels
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Explore strategies for pricing or reformulating
Early assessment and preparation will help ensure smooth compliance with UAE excise tax regulations 2026, avoid misclassification, and minimize potential penalties.
Conclusion
The UAE sugar tax 2026 represents a significant shift in how sweetened beverages are taxed. The new excise tax on sweetened drinks in UAE increases compliance responsibilities and places greater emphasis on accurate sugar classification and reporting.
To remain compliant with excise tax compliance UAE requirements, businesses must understand sugar thresholds, meet tax registration requirements, track compliance deadlines, and prepare for audits under UAE tax regulations 2026.
AMCA provides end-to-end support for businesses affected by the new excise tax on sweetened drinks in the UAE. Our services include excise tax registration, product classification, compliance review, return filing, and ongoing advisory support aligned with the UAE tax regulations 2026.
Contact AMCA today to receive expert guidance on complying with the UAE excise tax 2026 and ensuring your business remains fully compliant and future ready.
FAQs
1. What is the UAE’s new excise tax model?
The UAE’s new excise tax model (effective 1 Jan 2026) applies a tiered tax on sweetened drinks based on sugar content per 100 ml.
2. Which products are covered under the new excise tax model?
The tax applies to sweetened drinks including soft drinks, juices, concentrates, and energy drinks containing added sugar or sweeteners.
3. How is excise tax calculated under the new UAE tiered sugar model?
Excise tax is calculated per litre based on sugar content per 100 ml of the beverage.
4. What are the rates for sweetened drinks under the UAE tiered excise tax?