Replaces Cabinet Decision No. 52 of 2019 from 1 January 2026: keeps 100% excise on tobacco, e-smoking products and energy drinks, and moves sweetened drinks to a volumetric tax by sugar content (AED 0.79 per litre at 5 to under 8 grams per 100 ml, AED 1.09 at 8 grams or more, zero below 5 grams or artificial sweeteners only).
Cabinet Decision No. 197 of 2025 is the current list of excise goods, excise rates and the method for working out the excise price in the UAE. It was issued on 27 November 2025, took effect on 1 January 2026 and, by Article 14, repeals Cabinet Decision No. 52 of 2019. Its main change is that sweetened drinks are no longer taxed at a flat 50% of the excise price: from 1 January 2026 they carry a fixed amount per litre that depends on their sugar content, while tobacco, vaping liquids and devices and energy drinks stay at 100%.
Article 2 names five categories of excise goods: tobacco and tobacco products, liquids used in electronic smoking devices and tools, the devices and tools themselves, energy drinks and sweetened drinks. Articles 3 to 7 define each category. Tobacco is everything in Chapter 24 of the GCC Common Customs Tariff, including electrically heated cigarettes, except smoking-cessation products under customs codes the Minister specifies. Energy drinks include any beverage marketed as such containing stimulants like caffeine, taurine, ginseng or guarana, together with concentrates, powders, gels and extracts that can be made into one. Sweetened drinks are any product with added sugar, artificial sweeteners or other sweeteners produced for drinking, in ready-to-drink or concentrate form. Article 7(5) excludes drinks that are at least 75% milk or milk substitute, baby formula and baby food, special dietary and medical beverages under GCC standards 654 and 1366, and sweetened drinks prepared in restaurants and served in open containers. Article 8 keeps alcoholic drinks out of the energy and sweetened drink categories.
Article 10 sets the rates: 100% for tobacco, e-liquids, e-smoking devices and energy drinks; AED 0.79 per litre for sweetened drinks with 5 grams or more but less than 8 grams of sugar or other sweeteners per 100 ml; AED 1.09 per litre at 8 grams or more; and AED 0 per litre below 5 grams or where only artificial sweeteners are used. Concentrates are measured on the final-product basis using the producer's guidelines, naturally occurring sugar counts towards the total, and tax is rounded to four decimal places on registration and to the nearest fils on returns.
Articles 11 and 12 fix the excise price as the higher of the FTA's published standard price list and the designated retail sales price net of the tax it contains; for 100% goods the embedded tax is half the retail price. The designated retail price is the higher of the importer's or producer's declared recommended price and the market average retail price, both net of VAT. Article 13 lets the FTA demand documents and laboratory tests to classify a product and, under Article 13(4), taxes any sweetened drink without an accepted laboratory report at the highest sugar band until a report is provided.
Importers, producers, stockpilers and warehouse keepers of tobacco products, e-liquids, electronic smoking devices, energy drinks and sweetened drinks in the UAE, and any person registered or required to register for excise tax under Federal Decree-Law No. 7 of 2017.
| Article 2 | Lists the five categories of excise goods: tobacco and tobacco products, liquids for electronic smoking devices, the devices and tools themselves, energy drinks and sweetened drinks. |
| Article 3 | Tobacco products are all items in Chapter 24 of the GCC Common Customs Tariff imported, cultivated or produced in the UAE, including electrically heated cigarettes, but not products exclusively intended to assist smoking cessation under customs codes set by the Minister. |
| Article 6 | Energy drinks are beverages marketed or sold as such that may contain stimulants such as caffeine, taurine, ginseng or guarana, plus any concentrate, powder, gel or extract that can be turned into an energy drink. |
| Article 7 | Defines sweetened drinks as any product with added sugar, artificial sweeteners or other sweeteners produced for consumption as a drink, and excludes beverages with at least 75% milk or milk substitute, baby formula and baby food, special dietary and medical beverages, and drinks prepared and served open in restaurants. |
| Article 9 | Where an energy or sweetened drink already taxed in the UAE is combined with other products at the point of sale to a non-taxable person, no further tax is due, but the tax paid is not deductible under Article 16 of the Decree-Law. |
| Article 10 | Rates: 100% on tobacco, e-liquids, e-smoking devices and energy drinks; AED 0.79 per litre on sweetened drinks with 5 to under 8 grams of sugar per 100 ml; AED 1.09 per litre at 8 grams or more; AED 0 below 5 grams or with artificial sweeteners only; naturally occurring sugar counts toward the total. |
| Article 11 | The excise price is the higher of the FTA's published standard price list price, if any, and the designated retail sales price less the tax included in it; for goods taxed at 100% the included tax is half the designated retail price. |
| Article 12 | The designated retail sales price is the higher of the recommended retail price declared and affixed by the importer or producer net of VAT and the market average retail selling price net of VAT, calculated under FTA procedures. |
| Article 13 | The FTA may require documents, laboratory tests or other evidence to classify a product; a sweetened drink without an accepted laboratory report on its sugar content is taxed at the highest band until the report is submitted. |
| Article 14 | Repeals Cabinet Decision No. 52 of 2019 and all provisions conflicting with this decision. |
| Article 15 | Publication in the Official Gazette with effect from 1 January 2026. |
The decision sets no penalties of its own. Breaches of excise registration, return and payment duties are penalised under the Excise Tax Law and the administrative penalties table in Cabinet Decision No. 40 of 2017 as amended. Its own enforcement lever is Article 13: a product whose classification documents are not supplied in time may be treated as an excise good until proven otherwise, and an undocumented sweetened drink is taxed at the AED 1.09 per litre band.
For our beverage clients this decision changed the arithmetic of every January 2026 return. Under the 2019 decision a soft drink was taxed at 50% of its excise price; now the tax is a fixed amount per litre fixed by the sugar band, so we helped clients re-register each product on EmaraTax with the sugar content per 100 ml and a laboratory report the FTA accepts, because without the report Article 13(4) puts the drink in the AED 1.09 per litre band regardless of its actual recipe. We also check the 75% milk and milk-substitute exclusions and the restaurant exclusion for cafe operators who sweeten drinks on site. For tobacco, vape and energy drink importers nothing changed in rate, but we remind them that the excise price remains the higher of the FTA price list and the declared retail price, so an underdeclared recommended price does not reduce the tax.
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