UAE Excise Tax Update Effective 1 January 2026: Tiered Sugar-Based Tax on Sweetened Drinks Explained

A Major Shift in UAE Excise Tax Policy from 2026

The UAE continues to refine its tax framework in line with global best practices and public health objectives. From 1 January 2026, a significant update to the UAE Excise Tax regime will come into effect, directly impacting producers, importers, and stockpilers of sweetened drinks.

Under the new rules, excise tax on sweetened beverages will move from a flat or category-based approach to a “tiered-volumetric model”, where the tax payable per litre is directly linked to the total sugar and sweetener content of the product.

This update, confirmed by the Federal Tax Authority (FTA) and supported by the Ministry of Industry and Advanced Technology (MoIAT), reflects the UAE’s balanced approach—encouraging healthier consumption while providing clarity and predictability for businesses.

What Is Changing Under the New Excise Tax Model?

Starting 1 January 2026, excise tax on sweetened drinks will be calculated based on:

• Total sugar content per 100ml, including
  • natural sugars
  • added sugars
  • artificial or other sweeteners (e.g., honey, syrups)
• The volume of the drink (per litre basis)

This applies to ready-to-drink products as well as concentrates, powders, gels, extracts, and similar forms that can be converted into sweetened beverages.

Important clarification:
If a beverage contains only natural sugar with no added sugar or other sweeteners, it will not be subject to excise tax.

Four Categories of Sweetened Drinks (Effective 2026)

The FTA has defined four clear categories, providing much-needed certainty for manufacturers and importers.

1. High-Sugar Sweetened Drinks

• Sugar content: 8g or more per 100ml
• Excise tax: AED 1.09 per litre

2. Moderate-Sugar Sweetened Drinks

• Sugar content: 5g or more but less than 8g per 100ml
• Excise tax: AED 0.79 per litre

3. Low-Sugar Sweetened Drinks

• Sugar content: Less than 5g per 100ml
• Excise tax: AED 0 per litre

4. Artificially Sweetened Drinks

• Contain only artificial sweeteners, or
• Contain artificial sweeteners plus sugar/other sweeteners below 5g per 100ml
• Excise tax: AED 0 per litre

This structure rewards reformulation and transparent labelling while maintaining regulatory oversight.

Special Treatment of Carbonated and Energy Drinks

Carbonated Drinks

From 2026, carbonated drinks will no longer be treated as a standalone excise category.
Instead, excise tax applicability will depend entirely on:

• Sugar/sweetener content, and
• Whether the product qualifies as a “sweetened drink” under the new definition.

Energy Drinks (Exception)

Energy drinks remain unchanged:

• Excise tax rate: 100% of the excise price
• Calculation method: Existing framework (not the tiered-volumetric model)

This distinction has been explicitly confirmed by UAE tax authorities.

Mandatory Certification: A Non-Negotiable Requirement

From 1 January 2026, all producers, importers, and stockpilers of sweetened drinks must obtain:

“Emirates Conformity Certificate for Sugar and Sweeteners Content in Beverages (for Excise Tax purposes)”

Issued by:
Ministry of Industry and Advanced Technology (MoIAT)

Key requirements:

• Laboratory testing must be conducted by accredited UAE laboratories listed under:
  • National Accreditation Department
  • Emirates International Accreditation Centre
• Certificate details must be uploaded to EmaraTax when registering or updating excise goods.

Critical risk note:
If the certificate is not submitted, the FTA will automatically classify the product as a “High Sugar” drink, attracting the highest excise tax rate, until evidence proves otherwise.

New Registration Process via EmaraTax

To support implementation, the FTA has introduced a dedicated registration service for sweetened drinks on the EmaraTax digital platform.

For non-ready-to-drink products (powders, concentrates, gels):

• Sugar content and serving size information must be declared
• Serving size must align with preparation instructions on the product label
• Errors may lead to product registration suspension, impacting imports and customs clearance

Business Impact: What Companies Should Act on Now

With less than a year to prepare, affected businesses should:

• Review product formulations and sugar thresholds
• Assess excise tax exposure under the new volumetric model
• Initiate laboratory testing early
• Update product labelling and internal data systems
• Align EmaraTax registrations and supply-chain documentation

This update is particularly relevant for FMCG groups, beverage manufacturers, distributors, and regional brand owners operating in the UAE.

How NR Doshi & Partners Can Support

NR Doshi & Partners assists businesses across the UAE with:

• Excise tax impact assessments and product classification
• EmaraTax registration and compliance reviews
• Certificate coordination with accredited laboratories
• Supply-chain and pricing impact analysis
• Ongoing excise tax advisory and audit support

Our approach combines technical accuracy with commercial practicality, helping businesses remain compliant while protecting margins.

Conclusion

The UAE’s 2026 excise tax update represents a mature, data-driven evolution of the tax system—one that balances public policy objectives with business clarity. Early preparation will be key to avoiding unnecessary tax exposure, registration delays, or supply-chain disruption.