UAE Sugar-Based Excise Tax 2026: Complete Compliance Guide

UAE to Introduce Sugar-Based Excise Tax on Sweetened Beverages by 2026:

What Every Manufacturer Should Prepare For

Starting in 2026, the United Arab Emirates will transition from a fixed-percentage excise tax on sweetened beverages to a sugar-content-based system.

This reform will directly link the tax applied per liter of drink to the amount of sugar per 100 ml, representing a major policy shift by the UAE government to encourage healthier product formulations and reduce sugar consumption across the population.

At Product Registration UAE, our regulatory experts are already preparing clients in the beverage sector to navigate the upcoming transition — ensuring compliance, accurate classification, and a smooth approval process before the new excise model takes effect.

Understanding the Shift: From Fixed to Sugar-Based Excise Tax

Currently, sweetened drinks in the UAE are taxed at 50% of the retail price under the existing excise framework.

However, from January 1, 2026, the Federal Tax Authority (FTA) will implement a tiered volumetric system. This means that the higher the sugar content, the higher the excise duty per liter.

This shift follows international best practices already adopted in regions like the UK and Saudi Arabia, where sugar-based excise models have proven effective in motivating manufacturers to reduce sugar content while supporting national health strategies.

How the New Sugar-Based Tax Will Work

The tiered approach divides beverages based on their sugar levels:

• Low sugar: below 5g of sugar per 100ml

• Medium sugar: between 5g and 8g per 100ml

• High sugar: above 8g per 100ml

Drinks with artificial sweeteners will still be subject to excise registration, but may receive 0% tax under the new model.

On the other hand, beverages that exceed the high-sugar threshold will face the maximum excise rate, which will be determined by the UAE Cabinet in late 2025.

This tiered structure will affect all importers, distributors, brand owners, and authorized representatives dealing with sweetened beverages in the UAE market.

Key Regulatory Implications for Beverage Companies

The new system requires manufacturers to prove and declare sugar levels accurately. This includes:

1. Laboratory Testing & Certification
   Every beverage must have a verified sugar content report issued by a MOIAT-accredited laboratory. Products without certified sugar data will be automatically classified under the highest tax bracket.

2. Label and Dossier Consistency
   The sugar declaration on the Arabic label, dossier, and lab report must match exactly. Any inconsistency can trigger product holds or reclassification during import inspection.

3. FTA Excise Registration Updates
   Businesses must update their excise registration through the FTA Excise Goods Portal, submitting revised sugar-related data for each SKU before 2026.

4. ERP and Pricing Adjustments
   Finance and logistics teams must modify pricing systems to calculate excise by liter based on sugar content, ensuring accurate cost projections and compliance at customs.

Why the UAE Is Introducing This Policy

This transition reflects the UAE’s commitment to public health and regulatory modernization. The sugar-based excise tax aims to:

• Encourage healthier beverage reformulation

• Reduce obesity and diabetes rates

• Promote consumer awareness about sugar intake

• Align with the National Health Strategy 2031 and UAE Vision 2030

The government’s message is clear: reducing sugar means reducing tax — and improving public health outcomes.

What Companies Should Do Before 2026

Here’s a practical preparation roadmap for manufacturers and importers:

1. Map All Products:
List every beverage SKU currently imported or registered in the UAE, including powders, concentrates, and ready-to-drink variants.

2. Get Lab Testing Done Early:
Secure testing slots with MOIAT-approved labs to determine sugar content and document official reports.

3. Review Labels and Ingredients:
Ensure sugar levels, sweeteners, and claims are consistent and legally declared across all labels and dossiers.

4. Consider Reformulation:
Reducing sugar content by just 1–2 grams per 100 ml can drop a product into a lower tax band, providing a strong pricing advantage.

5. Update Internal Systems:
Train regulatory, finance, and supply chain teams to manage new excise calculations and documentation under the 2026 system.

Who Will Be Most Affected

• Soft drink manufacturers with high-sugar SKUs

• Importers distributing flavored drinks and syrups

• Private label owners who rely on third-party factories

• Retailers who may need to adjust price points or stock reformulated products

Companies that act proactively—by testing, relabeling, and registering their products now—will minimize disruption and maintain market access when the law takes effect.

The Role of Product Registration UAE

As one of the UAE’s trusted regulatory consulting firms, Product Registration UAE provides full support for:

• Excise registration and renewal with the FTA

• Laboratory testing coordination with MOIAT-approved facilities

• Label and formula validation aligned with UAE sugar regulations

• Strategic reformulation guidance to lower excise exposure

• Regulatory intelligence and updates on upcoming Cabinet decisions

By acting early, businesses can protect their profitability and ensure compliance with the UAE’s next-generation excise framework.

Recommended Reads to Nail Compliance Before 2026

• Food & Beverage Product Registration in the UAE: End-to-End Approval Guide

• Arabic Labeling Requirements in the UAE: 2025 Rulebook for FMCG & Beverages

• What Authorities Check on Labels in the UAE: Avoid Rejections at Inspection

Conclusion

The upcoming sugar-based excise tax marks a new era for the UAE beverage industry. It transforms taxation into a public health tool, rewarding companies that innovate for healthier, lower-sugar options.

For manufacturers, importers, and distributors, now is the time to test, reformulate, and update registrations—not in late 2025. Proactive compliance will save both costs and reputation in the long run.

For tailored assistance on dossier updates, excise registration, or sugar-content validation, contact Product Registration UAE or use our chatbot in the bottom right corner for direct consultation.

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