Excise goods: what it means in UAE tax.

What excise goods means

Also called: Excisable goods, Selective goods.

Excise goods are the products listed by Cabinet Decision as subject to excise tax. From 1 January 2026, the list and rates are in Cabinet Decision No. 197 of 2025, which repealed Cabinet Decision No. 52 of 2019. There are five categories: tobacco and tobacco products, liquids used in electronic smoking devices, electronic smoking devices and tools, energy drinks, and sweetened drinks.

The first four are taxed at 100% of the excise price. Tobacco covers everything in Chapter 24 of the GCC customs tariff, including electrically heated cigarettes, but not products intended only to help people stop smoking. Energy drinks cover drinks marketed as energy drinks that may contain stimulants such as caffeine, taurine, ginseng or guarana, plus concentrates and powders that make them.

Sweetened drinks are now taxed by sugar content rather than price. A drink with 8 grams or more of sugar or other sweeteners per 100 ml pays AED 1.09 per litre. A drink with 5 grams or more but under 8 grams pays AED 0.79 per litre. Below 5 grams, or with artificial sweeteners only, the rate is zero. Carbonated drinks are no longer a separate category, so a fizzy drink is taxed only if it meets the sweetened drink definition. For a beverage producer or importer, the sugar tier now decides the cost.

How it works

• Naturally occurring sugar counts towards the total when a drink also contains added sugar or other sweeteners.
• Concentrates, powders, gels and extracts are measured in their final drink form, following the producer's instructions.
• The person must give the FTA an accepted laboratory report on sugar and sweetener content. Without one, the drink is taxed in the highest sugar tier until a report proves otherwise.
• Drinks with at least 75% milk or milk substitutes, baby formula, drinks for special dietary or medical uses, and sweetened drinks made in restaurants and served in open containers are not sweetened drinks for this purpose.
• Drinks containing alcohol are outside the energy drink and sweetened drink categories.

Worked example

A juice drink producer in Sharjah releases three products in a month and holds accepted laboratory reports for each.

50,000 litres at 6 g sugar per 100 ml, at AED 0.79 per litre	AED 39,500
20,000 litres at 9 g sugar per 100 ml, at AED 1.09 per litre	AED 21,800
30,000 litres at 3 g sugar per 100 ml, at AED 0 per litre	AED 0
Excise tax due for the month	AED 61,300

Moving a recipe below 5 grams per 100 ml removes the excise tax on that product entirely.

Common mistakes

• Not filing laboratory reports, so every sweetened drink is taxed in the highest tier.
• Leaving out the natural sugar in fruit-based drinks that also contain added sugar.
• Assuming any milk-based drink is excluded, when the exclusion needs at least 75% milk or milk substitutes in the ready-to-drink product.

The law

• Cabinet Decision No. 197 of 2025 on Excise Goods, Tax Rates or Amounts Imposed on Excise Goods, and the Methods of Calculating the Excise Price, Articles 2 to 10, 13 and 14
• Federal Decree-Law No. 7 of 2017 on Excise Tax, as amended, Article 1 (definition of Excise Goods) and Article 2 Clause 1

Frequently asked questions

Does a zero sugar soft drink pay excise tax?

A drink sweetened only with artificial sweeteners falls in the AED 0 per litre category, so no excise tax is due, although the product is still within the sweetened drink rules.

Is a drink mixed in a cafe taxed?

Sweetened drinks prepared in restaurants or similar places and served to customers in open, unsealed containers for immediate drinking are excluded. Where a cafe mixes a drink from goods already taxed, no further excise tax is due.

Related terms

Excise tax · Import VAT · Designated zone · Tax registration number. See every term in the UAE tax glossary.

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