29 July 2026 · Goods
Which Goods Are Subject to Excise Tax
UAE excise tax applies to specific goods considered harmful to health or the environment: tobacco and tobacco products, energy drinks, electronic smoking devices and the liquids used in them, and sweetened drinks. Tobacco, energy drinks and vaping products are taxed at 100% of the excise price regardless of their formulation, while sweetened drinks are taxed under a tiered per-litre sugar model from 1 January 2026 rather than the old flat 50%. Pure natural juices with no added sugar or sweeteners are exempt, even when naturally high in sugar. Getting the classification right for each product is the first step before any registration or pricing decision, because the category — not just the sugar content — determines the rate.
Exiloz Management & Tax Consultant · Dubai-based FTA-focused advisory · VAT, corporate tax & accounting
The excise goods
Federal Decree-Law No. 7 of 2017 targets goods considered harmful to public health or the environment, and Cabinet Decision No. 52 of 2019 sets out the categories and original rates. Four groups are excisable in the UAE today, and three of them carry a flat 100% rate regardless of how the product is formulated.
- Tobacco and tobacco products: 100% of the excise price.
- Energy drinks: 100%, calculated on the excise price, not per litre.
- Electronic smoking devices and the liquids used in them: 100%.
- Sweetened drinks: tiered per-litre rate from 1 January 2026 (AED 0, 0.79 or 1.09).
- Rates apply from import, production or release from a designated zone.
What is not excisable
Not every drink on a Dubai shelf is excisable. The law carves out a specific exemption for genuinely natural juices, and it is judged on composition, not on how sweet the product tastes or how it is marketed.
- 100% natural fruit and vegetable juices with no added sugar.
- No added sweeteners of any kind, natural or artificial.
- Exempt even if the juice is naturally high in sugar.
- Blended or concentrate-based drinks may lose the exemption — check the recipe.
- Confirm product composition and labelling before assuming exemption.
Energy drinks are not a sweetened-drink tier
One of the most common classification errors is assuming a low-sugar energy drink falls into the sweetened-drink tiers. It does not. Energy drinks are their own excise category at a flat 100% of the excise price, whatever their sugar content, and the per-litre tiered model applies only to sweetened drinks. Misclassifying an energy drink as a tiered sweetened drink under-declares the tax due and is an expensive error to unwind in a later FTA review.
- Energy drinks: always 100%, never tiered by sugar.
- Sweetened drinks: tiered by sugar content per 100ml.
- Classify the product category first, before any tier analysis.
- A caffeine-and-taurine drink can still count as a sweetened drink if it isn't labelled or marketed as an energy drink — check the definition, not just the ingredients.
How Exiloz classifies your range
Classification decisions carry real financial weight, so we treat it as a structured exercise rather than a guess. We review each SKU's ingredients, labelling and marketing against the excise categories, flag anything that needs laboratory or conformity certification, and document the reasoning so it stands up if the FTA ever asks.
- Product-by-product review against the four excise categories.
- Flag sweetened drinks needing sugar-content certification.
- Written classification file for each SKU, kept for FTA review.
- Re-classify whenever a recipe or supplier changes.
Related guides
Frequently Asked Questions
For businesses classifying a product range for the first time, here is what trips people up most often.
Are energy drinks still taxed at 100%?
Yes. Energy drinks remain taxed at 100% of the excise price under Cabinet Decision No. 52 of 2019, and this did not change with the 2026 sugar-tax reform. The rate applies regardless of the drink's sugar content or formulation, because energy drinks are their own excise category, separate from sweetened drinks.
Is vaping liquid excisable?
Yes. Electronic smoking devices and the liquids used in them are taxed at 100% of the excise price. This covers both the hardware and the e-liquid itself, so a business importing either component needs to register and account for excise on it.
Are natural juices taxed?
No. Pure natural fruit and vegetable juices with no added sugar or sweeteners are exempt, even if their natural sugar content is high. The exemption depends on the recipe having no added sugar or sweetener, not on how the juice tastes or is marketed.
Can Exiloz classify our product range?
Yes. We review each product against the excise categories, confirm which rate or tier applies, and flag anything that needs a laboratory or conformity certificate before you import, produce or price it.
What happens if I misclassify a product?
An incorrect classification usually means excise was under-declared, which the FTA can identify in a review and assess with penalties and interest. Reclassifying after the fact is far more costly than getting the category right before your first shipment or production run.
Do sweetened drinks need a lab certificate to prove exemption?
If you're relying on the natural-juice exemption, you should be able to evidence that the product has no added sugar or sweeteners. For sweetened drinks that are excisable, a laboratory or conformity certificate is what determines which per-litre tier applies, rather than the top tier applying by default.
Does packaging size change the excise rate?
No. The 100% rates on tobacco, energy drinks and e-smoking products are calculated on the excise price regardless of pack size, and the sweetened-drink tiers are a per-litre rate applied to the sugar content per 100ml, so classification and sugar band matter far more than the container.
Is a sports drink treated the same as an energy drink?
Not necessarily. Whether a drink counts as an energy drink for excise purposes depends on its definition and marketing, not just its ingredients — some sports and functional drinks fall under the sweetened-drink tiers instead of the flat 100% energy-drink rate, so each product needs its own classification check.
Can a product move between excise categories over time?
Yes, if its formulation, ingredients or marketing change. A drink reformulated to remove caffeine and taurine and marketed purely as a soft drink could shift from the energy-drink category to the sweetened-drink tiers, so classification is not a one-time decision — it should be revisited whenever the product itself changes.
Classify your products correctly
Exiloz reviews your full product range, confirms which excise category and rate applies to each item, and flags what needs certification before you import, produce or price it.