UAE’s Federal Tax Authority will apply a new sugar-based excise tax model on sweetened drinks from 2026; businesses urged to get certified.
ABU DHABI: The Federal Tax Authority (FTA) has announced a major update to its excise tax framework, confirming the transition to a “Tiered Volumetric Model” for sweetened drinks, starting from early 2026. This move aims to promote healthier consumption habits by taxing drinks based on their sugar content.
The new model will replace the current fixed-rate excise tax with a scaled approach, linking the tax per litre to the total sugar and sweetener content per 100 ml. Producers, importers, and stockpilers of sweetened drinks must now prepare by reviewing product compositions and applying for accredited laboratory reports and conformity certificates.
Drinks will be categorised into four groups: high-sugar (8g+), moderate-sugar (5g–7.9g), low-sugar (under 5g), and those using only artificial sweeteners, which will attract 0% tax. Natural sugar drinks without any added sugar or sweeteners will also be exempt. Carbonated beverages will no longer be taxed separately and will instead be classified based on sugar content.
The FTA urges stakeholders to apply early for the “UAE Certificate of Conformity” through the Ministry of Industry and Advanced Technology. Certified lab results are mandatory for proper classification and avoiding automatic high-sugar tax status. Full guidance and examples are now available on the FTA website.
This change aligns with the UAE’s health goals and gives businesses a transition period to adapt their operations and ensure compliance. Energy drinks will continue to be taxed at 100% excise and are excluded from the new model.
