The Federal Tax Authority announced the start of the new mechanism for calculating the selective tax on sweetened drinks, effective January 1, 2026. The mechanism, known as the 'Graduated Volume Model', links the tax value for each liter of drink to the total amount of sugar and other sweeteners per 100 ml. This measure is implemented in accordance with Cabinet Decision No. 197 of 2025 and the latest amendments to Federal Decree-Law No. 7 of 2025 on the Selective Tax. The Authority emphasized that the goal of these amendments is to enhance community health and reduce the consumption of harmful goods, which helps in reducing diseases associated with unhealthy dietary patterns. To ensure smooth implementation, the Authority launched a new service through the 'Tax UAE' platform for registering sweetened drinks according to the new model. This service is based on the latest artificial intelligence technologies and is characterized by ease, speed, and efficiency. Producers, importers, and stockists of sweetened drinks must obtain an 'Emirates Certificate of Conformity for Sugar and Sweeteners Content in Drinks for Selective Tax Purposes' through the official website of the Ministry of Industry and Advanced Technology. After obtaining the certificate, it must be presented to the Authority during the registration or modification of the drink's registration via the 'Tax UAE' platform. In case of not obtaining this mandatory certificate, the drink will be classified as a high-sugar sweetened drink until a laboratory report is submitted proving that its sugar content is below the set limit for that category. The Authority has abolished the classification of carbonated drinks as a separate category of selective tax goods. Instead, the application of the tax will be determined based on their sugar and sweeteners content. Energy drinks will remain subject to the selective tax under the current calculation method at 100% of the selective tax price. Under the new rules, sweetened drinks are classified into four categories: 'high-sugar sweetened drinks' (8 grams or more of sugar per 100 ml), taxed at AED 1.09 per liter; 'medium-sugar sweetened drinks' (5 grams or more but less than 8 grams per 100 ml), taxed at AED 0.79 per liter; 'low-sugar sweetened drinks' (less than 5 grams per 100 ml), not taxed; and 'artificially sweetened drinks' (containing only artificial sweeteners or artificial sweeteners and less than 5 grams of sugar per 100 ml), also not taxed.
