The short answer
From 1 January 2026, UAE excise tax is 100% on tobacco products, e-cigarette liquids, vaping devices and energy drinks. Sweetened drinks are taxed per litre by sugar content: AED 1.09 at 8 g or more per 100 ml, AED 0.79 at 5 to under 8 g, and nothing below 5 g or with only artificial sweeteners.
What are the excise rates from 2026?
Set by Cabinet Decision No. 197 of 2025, effective 1 January 2026 (Ministry of Finance):
| Product | Excise tax |
|---|---|
| Tobacco products, e-cigarette liquids, vaping devices | 100% |
| Energy drinks | 100% |
| Sweetened drinks, 8 g or more sugar per 100 ml | AED 1.09 per litre |
| Sweetened drinks, 5 g to under 8 g | AED 0.79 per litre |
| Under 5 g, or artificial sweeteners only | AED 0 |
What changed for soft drinks?
The old flat rates were replaced by a tiered volumetric model: the tax now depends on how much sugar and other sweeteners a drink contains, not on its price or whether it is carbonated (Federal Tax Authority). A 330 ml can with 10 g of sugar per 100 ml carries about AED 0.36 of excise. Reformulating below 5 g per 100 ml removes the tax, which is why many producers changed recipes before the start date.
“be effective from 1 January 2026”
Who must register for excise tax?
Importers of excise goods, producers, and anyone who stockpiles them or releases them from a designated zone. Unlike VAT there is no turnover threshold: the activity itself triggers registration. Producers and importers of sweetened drinks also have to support the sugar content they declare, because it now sets the rate (FTA).
What does excise compliance involve?
Registration, product registration with sugar content evidence for sweetened drinks, periodic excise returns, designated-zone stock records and reconciliation of customs declarations to the excise returns. Errors follow the same disclosure and penalty rules as VAT, including the annualised 14% late-payment penalty from 14 April 2026 (Al Tamimi).
Frequently asked questions
Are diet drinks taxed?
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Drinks sweetened only with artificial sweeteners, or with under 5 g of sugar per 100 ml, are taxed at AED 0 per litre.
Are energy drinks in the sugar tiers?
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No. Energy drinks stay at 100% under the price-based method.
Do retailers need to register?
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Usually not, if they only buy duty-paid goods locally. Importers, producers and stockpilers do.
Sources
- Cabinet Decision No. 197 of 2025 on Excise Goods, Excise Tax Rates and the Methods of Calculating the Excise Price — UAE Ministry of Finance. Checked 17 October 2026.
- Commencement of the implementation of the new excise tax mechanism on sweetened drinks (FTA press release) — Federal Tax Authority via Zawya. Checked 17 October 2026.
- UAE introduces comprehensive tax penalty reform, effective 14 April 2026 (Cabinet Decision No. 129 of 2025) — Al Tamimi & Company. Checked 16 October 2026.