Sweet is now a number. From 1 January 2026, excise on sweetened drinks in the UAE stops being a flat percentage and starts pricing sweetness per‑litre. Cabinet Decision No. 197 of 2025 (which repeals the 2019 framework) ties tax to sugar per 100 ml: AED 0, 0.79, or 1.09 per litre, pushing reformulation and rewarding low‑ or zero‑sugar options.
Who Is Affected- Producers, importers, and stockpilers of sweetened beverages must reclassify product variants by sugar band and update excise registrations.
- Retailers and distributors should anticipate price realignments as the tax base moves from ad‑valorem to per‑litre linked to sugar thresholds.
What Changed
Under the 2019 rules, “soft drinks” covered carbonated beverages (excluding unflavoured sparkling water) and any concentrates/powders/gels/extracts used to make them. From 1 January 2026, that category is removed and such products fall under “sweetened beverages,” still capturing ready‑to‑drink and reconstituted forms but taxed by sugar content. Energy drinks remain taxed at 100% ad‑valorem.
Rates & Thresholds (Per Litre)
- ≥8 g sugar/other sweeteners per 100 ml: AED 1.09/L
- ≥5 g and <8 g per 100 ml: AED 0.79/L
- <5 g per 100 ml: AED 0/L
- Artificial‑sweetener‑only drinks: AED 0/L
These apply to ready‑to‑drink products and concentrates/powders/gels/extracts, measured in the final prepared form.
Scope, Exclusions, and Notable Clarifications
- “Sweetened beverages” include any drink with added sugar, artificial sweeteners, or other sweeteners, whether ready‑to‑drink or convertible from concentrates.
- Exclusions: beverages with ≥75% milk or milk alternatives, infant formula/follow‑up formula, and beverages for special dietary/medical uses per GCC standards. Also excluded: drinks prepared in restaurants (or similar) and served in open, non‑sealed containers for immediate consumption.
- Carbonation alone no longer triggers tax: a carbonated drink with no added sugar or sweeteners can fall outside scope; if it contains only artificial sweeteners, it is still in scope but taxed at AED 0/L.
Compliance & Evidence
- Classification depends on an FTA‑acceptable laboratory report; without it, products are temporarily deemed “high sugar” and taxed at the top rate until corrected.
- Businesses should obtain a MoIAT‑accredited conformity certificate (the Emirates Conformity Certificate for Sugar and Sweeteners Content). In the absence of a valid certificate, products will be automatically classified in the highest sugar tier, which can affect pricing and import timelines.
Timing, Transition & Administration
- The model applies from 1 January 2026. FTA/public‑practice clarifications provide mechanics for sugar measurement and transitional relief where higher tax was paid pending lab results, subject to strict conditions.
- For concentrates/powders, sugar is calculated on the ready‑to‑drink preparation using manufacturer instructions (or as determined by the FTA if instructions are missing/inaccurate).
What Businesses Should Do Now
- Map your portfolio against the 5g and 8g thresholds; model the tax per product variant at AED 0.79/L and AED 1.09/L.
- Commission accredited lab testing and secure the MoIAT conformity certificate to avoid default high‑sugar treatment.
- Update registrations and enterprise resource planning (ERP)/excise reporting for per‑litre calculations; align packs and claims with lab outcomes.
- Revisit pricing and reformulation strategies, especially product variants near the 5–8 g band.
Key Takeaways
Excise on sweetened drinks now turns on sugar density, not shelf price. Brands that test, certify, and, where feasible, reformulate will manage cost and compliance most effectively, while low/zero‑sugar lines gain a pricing edge under AED 0/L.Note: This Legal Update / Newsletter is intended for general informational purposes only and should not be construed as legal advice. It is based on laws and legal interpretations in effect as of the date of publication. Laws and regulations may change over time, and their application can vary depending on individual circumstances. Readers are strongly encouraged to seek specific legal counsel before acting on any of the information provided herein.rian and religious purpose in accordance with the law.