FTA Introduces Tiered Volumetric Excise Tax on Sweetened Drinks Starting 2026

UAE, 04 November, 2025: The UAE Federal Tax Authority (FTA) has announced a new “Tiered Volumetric Model” for excise tax on sugar-sweetened drinks, set to take effect in early 2026. The model links excise tax per litre to the sugar content per 100 ml, replacing the current fixed-rate system.

Producers, importers, and stockpilers are urged to review the sugar content in their products and obtain a UAE Certificate of Conformity from the Ministry of Industry and Advanced Technology (MoIAT), based on accredited laboratory reports, to ensure compliance. Drinks without such certification will automatically be classified as high-sugar.

Under the new rules:

• High-sugar drinks: 8g+ sugar per 100 ml

• Moderate-sugar drinks: 5–7.9g sugar per 100 ml

• Low-sugar drinks: <5g sugar per 100 ml

• Drinks with only artificial sweeteners: 0% excise tax

Carbonated drinks will no longer be a separate excise category; tax will depend on sugar content. Energy drinks remain subject to 100% excise tax. Drinks containing only natural sugar without added sweeteners will not be taxed.

The FTA has published detailed guidance and examples on its website to help businesses prepare for the transition. Early preparation is recommended to ensure smooth compliance once the legislation is enacted.