Abu dhabi: The Federal Tax Authority (FTA) has urged producers, importers, and stockpilers of sugar-sweetened drinks to start reviewing the sugar content in their products in anticipation of a new excise tax mechanism, which is slated to be implemented at the beginning of 2026. The mechanism will adopt a Tiered Volumetric Model, linking the excise tax per litre of sweetened drinks to the sugar content per 100 millilitres.
According to Emirates News Agency, the FTA emphasized the importance of early preparation to ensure a smooth transition to the new system. Producers and importers are required to register sweetened drinks as excise goods by submitting certified laboratory reports from facilities accredited by the Ministry of Industry and Advanced Technology (MoIAT). These reports must specify the sugar and sweetener content of each product.
The FTA has advised stakeholders to obtain UAE Certificates of Conformity from MoIAT regarding sugar and sweetener content. These certificates should be based on laboratory reports from accredited testing bodies such as the National Accreditation Department, the Emirates National Accreditation System, or other ISO/IEC 17025-certified laboratories.
Once the new rules are in place, any sweetened drink without a valid UAE Certificate of Conformity will automatically be classified as a high-sugar beverage until laboratory verification confirms otherwise. Comprehensive guidance on the mechanism and its application is available on the FTA website under Excise tax according to a tiered-volumetric model.
The Public Clarification issued by the FTA in September introduced key amendments to the excise tax framework, categorizing sweetened drinks into four groups: high-sugar drinks containing 8g or more of total sugar and sweeteners per 100ml, moderate-sugar drinks containing 5g to less than 8g per 100ml, low-sugar drinks containing less than 5g per 100ml, and drinks containing only artificial sweeteners. Beverages with only artificial sweeteners will be taxed at zero percent.
The FTA confirmed that carbonated drinks will no longer have a separate excise category, with their tax rate depending on sugar content, while energy drinks will continue to be subject to the current 100 percent excise tax rate. The Authority reiterated its commitment to providing businesses with ample time to adapt to the new framework by reviewing product compositions, updating registrations, and ensuring readiness before implementation.