Implementing the new mechanism for the excise tax on sweetened beverages according to the “graduated volumetric model”

Starting from the first of next January, the new mechanism for calculating the excise tax on sweetened drinks will begin to be implemented, which is based on the “graduated volumetric model” in the country, which links the value of the tax imposed on each liter of sweetened drink to the total amount of sugar and other sweeteners in every 100 ml of the drink.

This comes in implementation of the Honorable Cabinet Resolution No. 197 of 2025 regarding excise goods, the tax percentages or amounts imposed on them, and how to calculate the excise price, which will come into effect as of January 1, 2026, in accordance with the recent amendments to Federal Decree Law No. 7 of 2025 regarding excise tax.

The Federal Tax Authority confirmed that the new model comes within the framework of the efforts made to implement the directives of the wise leadership to work to accelerate the pace of building a safe and healthy society by reducing the rates of consumption of harmful goods, and avoiding the damage incurred by society in combating communicable diseases resulting from consumption patterns that are harmful to public health.

She explained that as part of early preparation to ensure the smooth implementation of the new amendments, the Federal Tax Authority launched during the recent period through the “Emirates Tax” platform the new service for registering sweetened drinks according to the “graduated volumetric model” instead of calculating them as a fixed percentage as is currently the case, as this service relies on the latest artificial intelligence technologies, which are characterized by ease, speed and efficiency in keeping with the continuous improvement of the authority’s services and customer experiences.

The Authority indicated that all producers, importers and stockists of sweetened beverages must obtain the “UAE Certificate of Conformity for the Content of Sugar and Sweeteners in Beverages for Excise Tax Purposes” through the official website of the electronic services of the Ministry of Industry and Advanced Technology, after obtaining the results of the laboratory examination from one of the accredited laboratories listed on the official websites of the accreditation bodies in the country, “the National Accreditation Administration and the Emirates International Accreditation Center.” After obtaining the certificate, it is submitted to the Authority during the completion of the registration procedures “or amending the registration.” Drinks through the Emirates Tax platform for digital tax services.

She stressed that if this mandatory certificate is not obtained and submitted within the registration procedures, the drink will be classified as a sweetened drink with high sugar, until a laboratory report is submitted proving that the sugar content in it is less than the limit set for this category.

During the past months, the Authority was keen to implement a comprehensive plan for early introduction of the new mechanism, as last September it issued a general clarification on the features of amending the mechanism for implementing the excise tax on sweetened beverages.

Comprehensive information was provided in an easy and clear manner through the Federal Tax Authority’s website about the new mechanism, its objectives, requirements, and how to determine the content of sugar and other sweeteners in sweetened beverages.

The Authority confirmed that by applying the new mechanism, the excise tax is calculated based on the total sugar content (natural sugar, added sugar, artificial sweeteners or other sweeteners) in the sweetened drink if it contains added sugar or other sweeteners (such as honey), whether it is ready to drink, or in the form of concentrates, powders, gels, extracts, or any form that can be converted into a sweetened drink. If a drink contains only natural sugar without added sugar or other sweeteners, excise tax will not apply to it.

She explained that for sweetened drinks that are not ready to drink, such as extracts, powders, gels, etc.; Sugar content information, and serving size representing the total number of servings that can be prepared according to the preparation instructions shown on the product label, must be provided in order to avoid any discontinuation or suspension of the products, which may subsequently affect import operations.
She confirmed that by implementing the new mechanism, the classification of soft drinks as an independent category of excise goods will be cancelled, and instead the extent to which the excise tax will be applied to soft drinks will be determined based on their sugar and sweetener content, and the extent of their classification as sweetened drinks. As for energy drinks, they will remain subject to the excise tax according to the current calculation method at 100% of the excise price, and will not be subject to the “graduated volumetric model.”

The Federal Tax Authority explained that under the new rules, excise tax will be applied to sweetened drinks based on their classification into 4 categories, including “high-sugar sweetened drinks” that contain 8 grams or more of total sugar and other sweeteners per 100 ml, and are subject to a tax of 1.09 dirhams per liter, “medium-sugar sweetened drinks” that contain between 5 grams or more to less than 8 grams of sugar. Total sugar and other sweeteners per 100 ml, and subject to a tax of 0.79 dirhams per liter. “Low-sugar sweetened beverages” that contain less than 5 grams of total sugar and other sweeteners per 100 ml, and subject to a tax of “zero” dirhams per liter. Fourth, “artificially sweetened beverages” that contain only artificial sweeteners, or that contain sweeteners. Artificial and the amount of sugar or other sweeteners in it is less than “5” grams per 100 ml, and is subject to a tax of “zero” dirhams per liter.