Tax Accounting Agents in UAE, Tax Consultants in Dubai, UAE

Key Changes at a Glance

Sweetened Drinks - New Tiered Tax System

The most significant change affects sweetened beverages, which will now be taxed based on sugar content rather than a flat rate. This revolutionary approach incentivizes healthier product formulations and provides clearer guidelines for manufacturers and importers.

Medium Sugar Content

5 - 8 grams per 100ml

AED 0.79/litre

Moderate taxation tier for beverages with controlled sugar levels

High Sugar Content

8+ grams per 100ml

AED 1.09/litre

Higher rate for beverages with elevated sugar content

Low/No Sugar

< 5 grams per 100ml

AED 0/litre

Tax-exempt for healthier formulations and artificial sweeteners only

📋 Important Exemptions

Several beverage categories are exempt from the sweetened drinks classification, regardless of sugar content:

🥛

Milk-Based Drinks

Beverages containing at least 75% milk or milk substitutes

👶

Baby Products

Baby formula and specialized baby food products

⚕️

Medical Beverages

Products for medical or special dietary purposes

🍽️

Restaurant Service

Drinks prepared and served in open containers for direct consumption

Unchanged Tax Rates (100%)

The following product categories will continue to be taxed at the existing 100% rate:

🚬 Tobacco and tobacco products100%
💨 E-cigarette liquids and devices100%
⚡ Energy drinks100%

What This Means for Your Business

🏭 For Importers and Manufacturers

Conduct a comprehensive review of your entire product portfolio
Determine the exact sugar content of all sweetened beverages in your range
Obtain certified laboratory reports proving sugar levels for each product
Update pricing strategies and cost structures before January 2026
Review supply chain and procurement processes for compliance

🏪 For Retailers

Prepare for price adjustments across beverage categories
Ensure proper product labeling with accurate sugar content information
Train staff on new tax classifications and compliance requirements
Update point-of-sale systems to reflect new pricing structures
Communicate changes to customers proactively

⚠️

Critical Compliance Requirement

Products without proper laboratory certification will automatically be taxed at the highest rate (AED 1.09 per litre) until the required documentation is provided to the Federal Tax Authority. Ensure all testing and certification is completed well in advance of the January 2026 deadline.

📊 Pricing Calculation Method

The excise price will continue to be calculated using the established methodology:

The higher value of:

FTA published standard price list, OR
Designated retail price minus the tax component

This ensures fair and consistent pricing across all market channels and prevents undervaluation.

Need Help with Compliance?

At Essence Accounting and Tax Consultancy LLC, we're FTA-accredited experts ready to help your business navigate these changes smoothly.

Product Classification

Expert tax rate determination for your entire product range

Laboratory Reports

Coordination with certified labs for sugar content testing

Registration Support

Complete FTA registration and compliance assistance

Price Restructuring

Strategic consultation for optimal pricing strategies

Don't wait until January 2026 to start preparing

📞+971 56 583 4586

✉️info@essenceuae.com

🌐essenceuae.com

Get Expert Consultation

Breaking: Major Excise Tax Changes Coming January 1, 2026

Key Changes at a Glance

Sweetened Drinks - New Tiered Tax System

📋 Important Exemptions

Unchanged Tax Rates (100%)

What This Means for Your Business

Critical Compliance Requirement

📊 Pricing Calculation Method

Need Help with Compliance?

Essence

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