As of January 1st… linking the “selective tax” on “sweetened drinks” to the amount of sugar

Starting from the first of next January, the new mechanism for calculating the excise tax on sweetened drinks will begin to be implemented, which relies 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, in implementation of Cabinet Resolution No. (197) of 2025 regarding excise goods, the percentages or tax amounts that are imposed on them, and how to calculate the excise price, which comes into effect. Implementation, as of January 1, 2026, in accordance with the recent amendments to Federal Decree Law No. (7) of 2025 regarding excise tax.

The authority confirmed in a statement yesterday 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.

She pointed out that all producers, importers and stores of sweetened drinks must obtain the “UAE Certificate of Conformity for the content of sugar and sweeteners in drinks (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 Centre). After obtaining the certificate, it is submitted to the Authority during the completion of the procedures for registering (or amending the registration of) beverages via the “Emirates” platform. Tax» 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.

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, but if the drink contains only natural sugar. Without added sugar or other sweeteners, excise tax will not apply.

She explained that for sweetened beverages that are not ready to drink, such as extracts, powders, gels, etc., sugar content information must be provided, and the serving size, which represents the total number of servings that can be prepared according to the preparation instructions shown on the product label, in order to avoid any suspension or suspension of the products, which may later affect import operations.

She confirmed that by applying the new mechanism, the classification of soft drinks as an independent category of excise goods will be cancelled, and instead the extent of the excise tax on 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 Authority explained that under the new rules, excise tax will be applied to sweetened beverages based on their classification into four categories:

-“High-sugar sweetened drinks” that contain eight grams or more of total sugar and other sweeteners per 100 ml, and are subject to a tax of AED 1.09 per litre.

-“Medium-sugar sweetened drinks” that contain between five grams or more to less than eight grams of total sugar and other sweeteners per 100 ml, and are subject to a tax of 0.79 dirhams per liter.

– “Low-sugar sweetened drinks” that contain less than five grams of total sugar and other sweeteners per 100 ml, and are subject to a tax of “zero” dirhams per liter.

– “Artificially sweetened beverages” that contain artificial sweeteners only, or that contain artificial sweeteners and the amount of sugar or other sweeteners in them is less than five grams per 100 ml, are subject to a tax of “zero” dirhams per liter.