FTA Public Clarification EXTP012

The UAE Federal Tax Authority (FTA) has announced a groundbreaking update with Public Clarification EXTP012, effective 1 January 2026, detailing a shift in the Excise Tax regime for sugar-sweetened beverages.

This transition introduces a tiered-volumetric model, replacing the current fixed-rate system and bringing the UAE’s tax framework closer in line with global health-focused practices. The new approach will tax drinks based on their sugar content per 100ml, with categories ranging from high to low sugar and even zero tax for beverages containing only artificial sweeteners.

The key changes include:

• New Definition of Sweetened Drinks: Now includes any beverage with added sugar, artificial sweeteners, or other sweeteners—whether ready-to-drink, concentrates, powders, or extracts.
• Tiered Taxation System: Excise tax will be based on sugar content per 100ml, divided into:
• High Sugar: ≥8g per 100ml
• Moderate Sugar: 5g to 8g per 100ml
• Low Sugar: <5g per 100ml
• Zero Tax: For drinks with only artificial sweeteners
• Carbonated Drinks No Longer Taxed Separately: Tax will be based on sugar content rather than carbonation.
• Increased Compliance Requirements: Businesses must obtain laboratory certification to verify sugar content and update product classifications on the FTA portal.

For businesses, this brings important compliance requirements, especially regarding sugar content testing, product registration, and timely updates to the FTA portal. Early preparation will be crucial to avoid higher tax liabilities.

To help you navigate these changes, we've attached our alert, which outlines the key updates, implications, and essential next steps.

At Andersen UAE, we specialize in excise tax compliance and regulatory matters. If you have any questions or require further assistance in understanding how this decision impacts your business, please don't hesitate to reach out to us. We're here to provide expert support and ensure your business stays compliant with these new requirements.

Read the full alert here.