UAE excise goods categories and tax rates underwent significant reform under Cabinet Decision No. 197 of 2025, effective 1 January 2026, replacing the previous Cabinet Decision No. 52 of 2019. The most notable change is the introduction of a tiered per-litre specific tax on sweetened drinks based on sugar content, replacing the previous flat 50% ad valorem rate. Abdelhamid & Co (FTA TAAN 20033908) advises businesses on product classification and compliance with the new rate structure.
Excise Goods Categories — Cabinet Decision No. 197 of 2025
Article 2 of Cabinet Decision No. 197 of 2025 defines five categories of excise goods subject to tax. This represents a structural continuation from the previous Decision but with critical definitional changes, particularly for sweetened drinks. Understanding these categories is essential for importers, producers, and Warehouse Keepers operating in the UAE market.
The Federal Tax Authority maintains a published price list for certain excise goods and determines procedures for product classification. Under Article 13 of the Decision, where a person fails to provide classification documents within the FTA's timeframe, the product may be treated as an excise good until proven otherwise.
UAE Excise Tax Rates 2026 — Complete Rate Table
| Excise Good | Tax Rate or Amount | Basis |
|---|---|---|
| Tobacco and tobacco products | 100% | Excise price |
| Liquids for electronic smoking devices | 100% | Excise price |
| Electronic smoking devices and tools | 100% | Excise price |
| Energy drinks | 100% | Excise price |
| Sweetened drinks (≥8g sugar per 100ml) | AED 1.09 | Per litre |
| Sweetened drinks (5–8g sugar per 100ml) | AED 0.79 | Per litre |
| Sweetened drinks (<5g sugar per 100ml) | AED 0 | Per litre |
| Sweetened drinks (artificial sweeteners only) | AED 0 | Per litre |
Tobacco and Tobacco Products — Excise Tax Definition
Under Article 3 of Cabinet Decision No. 197 of 2025, tobacco products include all items listed within Chapter 24 of the GCC Common Customs Tariff that are imported, cultivated, or produced in the UAE, including electrically-heated cigarettes. The tax rate is 100% of the excise price.
Ministerial Decision No. 249 of 2025 (effective 1 October 2025) excludes smoking cessation products from the definition of tobacco products. These are products listed under Chapter 24 of the GCC Tariff that are exclusively intended to assist in quitting smoking, including nicotine chewing gum (HS 2404.91.10), tablets (HS 2404.91.20), patches (HS 2404.92.10), sprays (HS 2404.99.10), nose drops (HS 2404.99.20), and injections (HS 2404.99.30).
Electronic Smoking Devices — Excise Tax Classification
Electronic smoking devices and their liquids are each taxed at 100% of the excise price. Ministerial Decision No. 1 of 2025 specifies the applicable HS codes: reusable electronic cigarette devices (8543.40.10), electronic water pipes (8543.40.20), electrically heated devices for cigarettes (8543.40.30), and their respective parts excluding batteries (8543.90.91 through 8543.90.98).
Liquids used in electronic smoking devices cover all liquids used in such devices whether or not containing nicotine, pursuant to customs codes specified by ministerial decision. This broad definition captures both nicotine and nicotine-free vaping liquids.
Energy Drinks — Excise Tax Definition and Rate
Energy drinks are taxed at 100% of the excise price. Under Article 6 of Cabinet Decision No. 197 of 2025, they include any beverages marketed or sold as energy drinks containing stimulant substances such as caffeine, taurine, ginseng, guarana, or substances with identical or similar effects. Concentrates, powders, gels, or extracts that can be transformed into energy drinks are also included.
Importantly, Article 8 excludes drinks containing alcohol from the energy drink (and sweetened drink) definitions, as alcoholic beverages are subject to separate regulatory frameworks in the UAE.
Excise Goods Categories — Common Classification Errors
Misclassification carries significant financial consequences. Under Article 13(3) of Cabinet Decision No. 197 of 2025, where a person fails to prove a product is not an excise good, the FTA may treat it as taxable. For sweetened drinks, Article 13(4) requires submission of an accredited laboratory report proving sugar content — without it, the highest tax category applies.
Common errors include treating concentrated products as non-excise goods when they can be diluted into sweetened drinks, failing to test products for total sugar including naturally occurring sugars, and assuming smoking cessation products are taxable when they now have specific exemptions.
Why Choose Abdelhamid & Co for Excise Tax Product Classification
Our tax agency service includes product classification advisory for excise goods. We help businesses determine whether their products fall within taxable categories, apply for appropriate HS code rulings, obtain and maintain laboratory reports for sugar content verification, and register products on the FTA price list.
Frequently Asked Questions
What are the excise goods categories in the UAE from 2026?
Under Cabinet Decision No. 197 of 2025, there are five excise goods categories: tobacco and tobacco products, liquids used in electronic smoking devices, electronic smoking devices and tools, energy drinks, and sweetened drinks. Each category has specific tax rates ranging from 100% of excise price to per-litre specific amounts.
Are smoking cessation products subject to excise tax in the UAE?
No. Ministerial Decision No. 249 of 2025 (effective 1 October 2025) excludes products exclusively intended for smoking cessation from the definition of tobacco products, including nicotine gum, patches, tablets, sprays, nose drops, and injections under specific HS codes in Chapter 24 of the GCC Customs Tariff.
How is excise tax calculated on sweetened drinks in the UAE?
From 1 January 2026, sweetened drinks are taxed per litre based on sugar content: AED 1.09 for ≥8g/100ml, AED 0.79 for 5-8g/100ml, and zero for <5g/100ml or drinks with artificial sweeteners only. If naturally occurring sugar is present alongside added sugar, both are counted toward the threshold.
What excise goods categories in the UAE are taxed at 100%?
Tobacco products, liquids for electronic smoking devices, electronic smoking devices and tools, and energy drinks are all taxed at 100% of the excise price per Article 10 of Cabinet Decision No. 197 of 2025.
What happens if I cannot prove my product's sugar content to the FTA?
Under Article 13(4) of Cabinet Decision No. 197 of 2025, if you fail to submit an accredited laboratory report proving sugar content, the FTA will impose excise tax at the highest sugar category (AED 1.09/litre). Tax under the correct category applies only after submitting a valid laboratory report.
Related Excise Tax Services
- VAT & Excise Tax Compliance Review — verify correct product classification
- Excise Tax Registration — register as a taxable person or Warehouse Keeper
- Reconsideration Requests — dispute classification or penalty decisions
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