How Your Favourite Drinks Are Now Priced In 2026 With New UAE Excise Rules?

How Your Favourite Drinks Are Now Priced In 2026 With New UAE Excise Rules?

Starting 1 January 2026, the UAE has introduced a new tiered-volumetric Excise Tax model for sweetened drinks, changing the way beverages are priced based on their sugar content. This move aims to promote healthier choices and ensure transparency in the market.

Under the new system, drinks are classified into categories according to their sugar levels. Beverages with 8 grams or more of sugar per 100 millilitres (ml) fall into the high-sugar category and attract a tax of AED 1.09 per litre. Drinks with between 5 and 8 grams of sugar per 100 millilitres (ml are considered moderate sugar and taxed at AED 0.79 per litre. Those with less than 5 grams of sugar per 100 millilitres (ml, or drinks that contain only artificial sweeteners, are exempt from tax.

New Excise rate chart:

For example, a 1.5-litre cola with 10 grams of sugar per 100 millilitres (ml) will incur a tax of AED 1.64, while a 500-millilitre iced tea with 6 grams of sugar will be taxed AED 0.40. Diet sodas with artificial sweeteners only will remain tax-free.

To ensure accurate classification, businesses must provide a MOIAT-accredited laboratory certificate during registration or updates on the Emara Tax platform. If this certificate is missing, the drink will automatically be treated as high sugar and taxed at AED 1.09 per litre.

Transitional relief: 

A transitional relief period from January to June 2026 allows businesses to submit certificates later and claim refunds or adjustments, provided the stock remains unsold and proper documentation is maintained.

Special rules apply to concentrated products such as powders, gels, and extracts. Their sugar content is calculated based on the ready-to-drink beverage prepared according to the producer’s instructions. If instructions are missing or inaccurate, businesses must submit a lab certificate for one unit and calculate the maximum ready-to-drink volume using the formula: Sugar per unit (g) × 20. For instance, if a 200-gram drink powder contains 50 grams of sugar, the maximum ready-to-drink volume is 1 litre, and the tax would be AED 0.79.

Certificates must clearly state the amount of added sugar, other sweeteners, or artificial sweeteners, as well as the total sugar content. A single certificate can cover all sizes of the same drink, but different flavours require separate registration and testing.

To comply with these rules, businesses must obtain certificates from MOIAT-authorized laboratories, which include:

1. SGS Global Laboratories for sugar and sweetener analysis
2. National Laboratory Services Centre (NLRC) for added sugar verification.

Finally, businesses holding stock on 1 January 2026 should check if they qualify as stockpilers under Excise Tax rules, as outlined in Public Clarification EXTP003.

This new model not only encourages healthier consumption but also demands accurate compliance from businesses. Updating registrations, securing proper lab certificates, and reviewing stockpiling obligations are essential steps to avoid penalties and ensure smooth operations. 

Carbonated drinks:

Earlier in the UAE, carbonated drinks were specifically listed as excisable goods and were subject to a flat 50% Excise Tax, as per the Federal Tax Authority rules.

However, under the new tiered-volumetric Excise Tax model introduced by the FTA, carbonated drinks are no longer treated as a separate excise category.

Now, beverages including carbonated drinks are taxed based on their sugar and sweetener content, under the broader definition of sweetened drinks.

So, the key change is this: excise tax is no longer about whether a drink is carbonated it’s about how much sugar or sweeteners it contains.

How CLA Emirates Can Help?

At CLA Emirates, we specialize in guiding businesses through VAT and Excise compliance.
Reach out to our team for personalized guidance and smooth implementation of the new excise regime.