New UAE Rules: No Sugar Certificate Means Highest Tax Bracket for Beverages

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Effective January 1, 2026, the UAE will overhaul its beverage taxation by replacing the long-standing 50% flat excise duty with a "tiered-volumetric model" based on sugar content. This strategic shift aims to combat rising rates of obesity and diabetes by making high-sugar drinks more expensive while incentivising manufacturers to reformulate their products. Under the new system, beverages containing 8 grams or more of sugar per 100ml will incur a tax of Dh1.09 per litre, while those with 5 to 8 grams will be taxed at Dh0.79 per litre. Significantly, drinks with less than 5 grams of sugar or those containing only artificial sweeteners will be exempt from the tax entirely.

To ensure compliance, the Federal Tax Authority (FTA) requires all producers and importers to obtain a mandatory "conformity certificate" from the Ministry of Industry and Advanced Technology (MoIAT) verifying sugar levels through accredited laboratory testing. Products without this certification will automatically be defaulted to the highest tax bracket, regardless of their actual sugar content. This transition aligns the UAE with international public health standards and reflects a broader GCC-wide trend toward using fiscal policy as a tool for preventive healthcare and economic diversification.