Since 1 January 2026, UAE excise on sweetened drinks depends on sugar per 100 ml. Drinks with 8 grams or more pay AED 1.09 per litre, those with 5 to under 8 grams pay AED 0.79, and those below 5 grams or with only artificial sweeteners pay nothing. Energy drinks stay at 100%.
What are the new sugar tiers?
AED 1.09 per litre at 8 g or more of sugar per 100 ml, AED 0.79 per litre at 5 g to under 8 g, and AED 0 below 5 g or for artificial sweeteners only, under Cabinet Decision No. 197 of 2025 (UAE Ministry of Finance).
What stayed at 100%?
Tobacco and tobacco products, electronic smoking devices and liquids, and energy drinks (Ministry of Finance).
What do producers and importers need to do?
Hold lab evidence of sugar content per product, register products with the FTA, and update pricing. The FTA confirmed the start of the new mechanism (Federal Tax Authority via Zawya).
How does this affect pricing?
A 1.5-litre bottle in the top tier carries about AED 1.64 of excise. Reformulating under 5 g removes it entirely, which is why many brands are changing recipes.
Worked example: one product, three recipes
| Sugar per 100 ml | Rate | Excise on a 330 ml can |
|---|---|---|
| 10 g | AED 1.09 per litre | about AED 0.36 |
| 6 g | AED 0.79 per litre | about AED 0.26 |
| 4 g | AED 0 | AED 0 |
Rates from Cabinet Decision No. 197 of 2025.
Records the FTA will expect
Laboratory reports showing sugar content per product, product registrations, import and production volumes, and stock movements. If a recipe changes, the evidence must change with it, or the product can be taxed at the higher tier.
Frequently asked questions
Is diet cola taxed?
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Drinks sweetened only with artificial sweeteners are in the AED 0 tier.
Are energy drinks in the sugar tiers?
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No. They stay at 100%.
Do retailers pay excise?
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Excise is accounted for by the businesses that produce or import the goods and is passed on in the price, so a retailer buying duty-paid stock locally does not file excise.
Are sweetened milk drinks covered?
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Product scope depends on the decision definitions; check each product line before assuming a rate.
Sources
- Cabinet Decision No. 197 of 2025 on Excise Goods, Excise Tax Rates and the Methods of Calculating the Excise Price — UAE Ministry of Finance. Checked 17 October 2026.
- Commencement of the implementation of the new excise tax mechanism on sweetened drinks (FTA press release) — Federal Tax Authority via Zawya. Checked 17 October 2026.