UAE Introduces Tiered Volumetric Tax on Sweetened Beverages

Effective January 1, 2026, all sweetened beverages in the UAE will be taxed based on their sugar content, regardless of whether they are ready-to-drink, concentrates, powders, gels, extracts, or any form that can be mixed or diluted.

Under Cabinet Decision No. 197 of 2025, issued by the Ministry of Finance, excise tax on sweetened drinks will now be calculated based on the total sugar content per 100 ml:
- High Sugar – drinks containing more than 8 g of sugar are taxed at AED 1.09 / liter
- Moderate Sugar – drinks with more than 5 g but less than 8 g of sugar are taxed at AED 0.79 / liter
- Low Sugar – drinks containing less than 5 g of sugar are taxed at AED 0 / liter
- Artificial Sweeteners – drinks with artificial sweeteners only, or artificial sweeteners and less than 5 g sugar, are taxed at AED 0 / liter

Drinks that contain only natural sugars without any added sugar or sweeteners will not be taxed.

The Authority urges all concerned taxable persons to submit the required laboratory reports and apply for the Accredited Conformity Certificates to confirm sugar and sweetener levels and benefit from the newly amended tax rates. Without the required reports and certificates, the sweetened drinks will automatically be classified as “high sugar”.

This amendment aims to promote healthier sugar consumption across the country and to align the UAE with the international best practices for taxation on sweetened drinks. Under the current tax system, sweetened beverages are subject to a flat rate of 50% of the excise price.