Excise tax in the UAE is charged on goods considered harmful to health. Tobacco products, electronic smoking devices and their liquids, and energy drinks are taxed at 100%. Since 1 January 2026, sweetened drinks are taxed by how much sugar they contain: AED 1.09 per litre for high-sugar drinks, AED 0.79 per litre for medium-sugar drinks, and nothing for low-sugar drinks.
Source: Cabinet Decision No. 197 of 2025 (Ministry of Finance)
UAE Excise Tax Rates 2026
| Excise goods | Rate |
|---|---|
| Tobacco and tobacco products | 100% |
| Electronic smoking devices and tools | 100% |
| Liquids for electronic smoking devices | 100% |
| Energy drinks | 100% |
| Sweetened drinks, 8g or more sugar per 100ml | AED 1.09 per litre |
| Sweetened drinks, 5g to under 8g sugar per 100ml | AED 0.79 per litre |
| Sweetened drinks, under 5g sugar per 100ml | AED 0 |
| Drinks with only artificial sweeteners | AED 0 |
Cabinet Decision No. 197 of 2025 took effect on 1 January 2026 and replaced Cabinet Decision No. 52 of 2019. The Ministry of Finance publishes it as an unofficial English translation.
Source: Cabinet Decision No. 197 of 2025 | Ministry of Finance announcement
The New Sugar-Based Model for Sweetened Drinks
Before 2026, sweetened drinks were taxed as a percentage of their price. Under the new "tiered volumetric" model, the tax depends on the total sugar and other sweeteners per 100ml. Lower-sugar drinks pay less or nothing, which encourages healthier products.
- High sugar: 8g or more per 100ml, AED 1.09 per litre
- Medium sugar: 5g to under 8g per 100ml, AED 0.79 per litre
- Low sugar: under 5g per 100ml, no tax
- Artificial sweeteners only: no tax
Energy drinks are not part of this model. They stay at 100%.
Source: Ministry of Finance | FTA
Lab Reports and Conformity Certificates
The sugar tier must be backed by evidence. The FTA says a sweetened drink without a valid UAE Certificate of Conformity is treated as high-sugar until an approved laboratory report is submitted. The Ministry of Finance also says the highest tier applies if a required lab report isn't submitted.
Source: FTA
How 100% Excise Is Calculated
For goods taxed at 100%, the tax is based on the excise price, which is the higher of the price published by the FTA and the retail sale price set by the importer or producer, without tax. The FTA explains that for these goods, the excise tax equals half of the retail shelf price. For example, a pack of cigarettes sold for AED 30 includes AED 15 of excise tax.
Source: FTA
Excise Tax and VAT
Excise tax is separate from VAT. VAT at 5% still applies to most sales of excise goods. If you import, produce or store excise goods, check your excise registration and return obligations with the FTA, as excise has its own rules. See our VAT registration guide.
Frequently Asked Questions
What is the excise tax rate in the UAE?
100% on tobacco products, electronic smoking devices and liquids, and energy drinks. Sweetened drinks are taxed by sugar content: AED 1.09 or AED 0.79 per litre, or nothing for low-sugar drinks.
When did the sugar-based excise tax start?
On 1 January 2026, under Cabinet Decision No. 197 of 2025.
Are diet drinks subject to excise tax?
Drinks with only artificial sweeteners are taxed at AED 0.
Are energy drinks part of the sugar tiers?
No. Energy drinks stay at 100%.
What if I don't have a lab report for my drink?
It is treated as high-sugar (AED 1.09 per litre) until an approved lab report is submitted.
Note: This article provides general information only and is not tax advice. Confirm the current requirements with the Federal Tax Authority or a qualified tax professional.