UAE sugar tax: Highly sweetened drinks to pay more, artificial sweeteners 0%
The UAE Federal Tax Authority (FTA) has issued additional details as the country finalizes plans to introduce an excise tax on sweetened drinks starting in 2026.
The tax regime will be based on a “tiered volumetric model” which will “tie the excise tax to be levied on a litre of sugar-sweetened drinks to the amount of sugar present in 100ml, based on the quantity of sugar or sweetener,” said the FTA. This is contrary to the fixed percentage as with the current tax being levied.
In addition, the authority has also stated that upon enforcement of the rules, “should any sugar-sweetened drink be offered for sale and not in possession of a valid UAE Certificate of Conformity it will be deemed to be a high-sugar drink until an authorized laboratory report is produced which shows the sugar content in the drink is below the cut-off for high-sugar drinks”
It has called on manufacturers, importers, and stockpilers of sugar-sweetened drinks to “review the sugar content of their drinks to prepare for the enforcement of the new tax rules”.
The plan is to commence the transition from the beginning of 2026 after the issuance of a decree which will come in a legislation to be issued to specify the tax’s rules and frameworks.
What is a 'sweetened drink' as per law?
To begin with, the authority has laid out the definition of a 'sweetened drink' for the levy of the new tax .
The definition of a sweetened drink shall mean a product to which a source of sugar/artificial sweetener/other sweetener is added and is produced to be consumed as a drink including ready-to-drink or in form of concentrates, powders, gels, extracts or any other form that is converted to a sweetened drink as per new rules.
Excise Tax shall be levied on the basis of total sugar content (natural sugar+ added sugar+ other sweeteners) present in the sweetened drink if it contains added sugar/other sweetener (e.g., honey).
Drinks that contain natural sugar only (without added sugar/ sweetener) will be exempted from the excise tax.
Drinks that contain artificial sweetener only (without added sugar/ sweetener) will be levied with 0 per cent excise tax.
Carbonated drinks as a separate category of excise goods are being abolished and the levying of excise tax on these products would be subject to the categorization as sweetened drinks on the basis of the sugar content.
Energy drinks would continue to attract the existing excise tax of 100 per cent of the excise price and shall not be subjected to the 'Tiered Volumetric Model'.
As per new rules, sweetened drinks will be classified under the following categories:
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High-sugar drinks: containing 8g or more of total sugar and other sweeteners per 100 ml.
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Moderate-sugar drinks: contain 5g or more and less than 8g of total sugar and other sweeteners per 100 ml.
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Low-sugar drinks: contain less than 5g of total sugar and other sweeteners per 100 ml.
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Sweetened drinks with artificial sweetener only.
Early preparation
While encouraging those eligible for the tax to prepare, the authority highlighted that an early preparation would aid in a smooth transition in the application of the excise tax.
Taxable individuals will be required to register sweetened beverages as excise commodities, following the approval of a certified laboratory report accredited by the Ministry of Industry and Advanced Technology (MoIAT), upon the system’s regulating legislation coming into effect.
The report should indicate the presence of sugar and sweeteners content as supporting documentation or be classified as a high-sugar sweetened beverage.
The authority has made the information available clearly on its website, in a bid to enlighten people on how to calculate the tax based on the new system, as well as the objectives, requirements and method for determining sugar and other sweetener contents in such beverages.
In a bid to avoid any negative repercussions on businesses, the FTA has been undertaking awareness campaigns about the new system to facilitate a smooth transition for those who are liable for the tax.
It underlined its keenness to provide suppliers, importers, and other stakeholders with sufficient time for preparation in order to apply the mechanism and look over their product ingredients, update their records with the FTA, and be operationally ready.
UAE Certificate of Conformity
Excise taxpayers have been called upon to apply online for the issuance of the UAE Certificate of Conformity to determine the sugar and sweetener content in drinks .
The certificate indicates the amount of total sugar (natural sugar + added sugar + other sweeteners) in sweetened drinks that are manufactured, imported, warehoused, or cleared from a customs warehouse and whether the sweetened drinks contain artificial sweeteners or not .
The FTA pointed out that the definition of a sweetened drink, according to the rules that will be published at the beginning of 2026, will be as follows: A sweetened drink is a product to which sugar, artificial sweeteners or other sweeteners are added and which is intended to be consumed as a drink, ready to drink or in the form of concentrates, powders, gels, extracts, or any form that can be processed to produce a sweetened drink .
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