The UAE will begin implementing the new mechanism for calculating excise tax on sweetened beverages, based on a “gradual volumetric model,” starting January 1st. This is in accordance with Cabinet Resolution No. (197) of 2025 concerning excise goods, the tax rates or amounts imposed on them, and how the excise price is calculated. This aligns with the recent amendments to Federal Decree-Law No. (7) of 2025 on excise tax, whereby the tax levied on each liter of sweetened beverage will be linked to the total amount of sugar and other sweeteners in every 100 ml of the beverage.
The new model: The Federal Tax Authority confirmed that the new model is part of ongoing efforts to implement the directives of the wise leadership to accelerate the building of a safe and healthy society by reducing the consumption of harmful goods and mitigating the damage incurred by society in combating communicable diseases resulting from consumption patterns detrimental to public health. The Authority explained that this early preparation is part of ensuring the smooth implementation of the new amendments. The Federal Tax Authority (FTA) recently launched a new service on its Emirates Tax platform to register sweetened beverages using a “gradual volumetric model” rather than the current fixed percentage calculation. This service leverages the latest artificial intelligence technologies, offering ease of use, speed, and efficiency, aligning with the FTA’s ongoing efforts to improve its services and customer experience.
The FTA emphasized that all producers, importers, and distributors of sweetened beverages must obtain the “Emirates Certificate of Conformity for Sugar and Sweetener Content in Beverages (for Excise Tax Purposes)” through the Ministry of Industry and Advanced Technology’s official e-services portal. This certificate requires laboratory test results from an accredited laboratory listed on the official websites of the accreditation bodies in the UAE. The FTA stressed that failure to obtain and submit the mandatory certificate as part of the registration process will result in the beverage being classified as a high-sugar sweetened beverage until a laboratory report is provided demonstrating that its sugar content is below the limit set for this category. The authority confirmed that, under the new mechanism, the excise tax is calculated based on the total sugar content (natural sugar, added sugar, and artificial or other sweeteners) in the sweetened beverage if it contains added sugar or other sweeteners (such as honey), whether it is ready-to-drink, in the form of concentrates, powders, gels, extracts, or any form that can be converted into a sweetened beverage. However, if a beverage contains only natural sugar without added sugar or other sweeteners, the excise tax will not apply. The authority clarified that for sweetened beverages not ready-to-drink, such as extracts, powders, gels, and others, information on the sugar content and the serving size (the total number of servings that can be prepared according to the preparation instructions on the product label) must be provided. This is to avoid any product suspensions or halts that could subsequently affect import operations. The Federal Tax Authority (FTA) confirmed that, upon implementation of the new mechanism, soft drinks will no longer be classified as a separate category of excise goods. Instead, the excise tax on soft drinks will be determined by their sugar and sweetener content and classification as sweetened beverages. Energy drinks, however, will remain subject to excise tax at 100% of the excise price under the current calculation method and will not be subject to the “gradual volumetric model.”
Four Categories
The FTA explained that under the new rules, excise tax on sweetened beverages will be applied based on their classification into four categories: “High-sugar sweetened beverages” containing 8 grams or more of total sugar and other sweeteners per 100 ml, subject to tax at a rate of AED 1.09 per liter; and “Medium-sugar sweetened beverages” containing between 5 grams or more and less than 8 grams of total sugar and other sweeteners per 100 ml, subject to tax at a rate of AED 0.79 per liter. Low-sugar sweetened beverages containing less than 5 grams of total sugar and other sweeteners per 100 ml are subject to a tax of zero dirhams per liter. Artificially sweetened beverages containing only artificial sweeteners, or containing artificial sweeteners with less than 5 grams of sugar or other sweeteners per 100 ml, are also subject to a tax of zero dirhams per liter.
The FTA explained that under the new rules, excise tax on sweetened beverages will be applied based on their classification into four categories: “High-sugar sweetened beverages” containing 8 grams or more of total sugar and other sweeteners per 100 ml, subject to tax at a rate of AED 1.09 per liter; and “Medium-sugar sweetened beverages” containing between 5 grams or more and less than 8 grams of total sugar and other sweeteners per 100 ml, subject to tax at a rate of AED 0.79 per liter. Low-sugar sweetened beverages containing less than 5 grams of total sugar and other sweeteners per 100 ml are subject to a tax of zero dirhams per liter. Artificially sweetened beverages containing only artificial sweeteners, or containing artificial sweeteners with less than 5 grams of sugar or other sweeteners per 100 ml, are also subject to a tax of zero dirhams per liter.