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Cabinet Decision No. 197 of 2025 establishes updated regulations for excise tax in the UAE, effective from 1 January 2026. Implementing Article 2 and Article 3 of Federal Decree-Law No. 7 of 2017, the Decision defines taxable excise goods including tobacco, electronic smoking devices, energy drinks, and sweetened drinks. It introduces a tiered tax structure for sweetened drinks based on sugar content per 100ml. The Decision clarifies the calculation of the excise price and designated retail sale price, while repealing Cabinet Decision No. 52 of 2019 to ensure alignment with current GCC Common Excise Tax Agreement standards.

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Excise Goods, Tax Rates or Amounts Imposed on Excise Goods, and the Methods of Calculating the Excise Price

Cabinet Decision No. 197 of 2025

Issued 27 Nov 2025 - (Effective from 1 Jan 2026)

The Cabinet has decided

Having reviewed the Constitution,
Federal Law No. 1 of 1972 on the Competencies of Ministries and Powers of the Ministers, and its amendments,
Federal Decree-Law No. 13 of 2016 on the Establishment of the Federal Tax Authority, and its amendments,
Federal Decree-Law No. 7 of 2017 on Excise Tax, and its amendments,
Federal Decree-Law No. 28 of 2022 on Tax Procedures, and its amendments,
Federal Decree No. 32 of 2017 ratifying the Common Excise Tax Agreement of the States of the Gulf Cooperation Council (GCC),
Cabinet Decision No. 52 of 2019 on Excise Goods, Excise Tax Rates and the Methods of Calculating the Excise Price, and
Pursuant to the presentation of the Minister of Finance and approved by the Cabinet.

Article 1 - Definitions

In the application of the provisions of this Decision, the following words and expressions shall have the meanings assigned against each, unless the context requires otherwise:

State	:	United Arab Emirates.
Authority	:	Federal Tax Authority.
Minister	:	Minister of Finance.
Tax	:	Excise Tax.
Decree-Law	:	Federal Decree-Law No. 7 of 2017 on Excise Tax, and its amendments.
Excise Goods	:	Goods that shall be determined as subject to Tax by this Decision.
Taxable Person	:	Any Person registered or obligated to register for Tax purposes under the Decree-Law.
Importer	:	The natural or legal Person whose name appears for customs clearance purposes as the importer of the Excise Goods on the date of import.
Excise Price	:	The price calculated in accordance with this Decision.
Value Added Tax	:	Tax imposed on the import and supply of goods and services according to the Federal Decree-Law No. 8 of 2017 on Value Added Tax, and its amendments.
Milk	:	Animals' milk, remanufactured milk, powdered milk, yoghurt (fermented milk), whey, remanufactured whey, and does not include cream.
Milk Substitutes	:	A drink that is used for all or most uses of milk as a milk substitute, has a consistency similar to milk, and contains 120mg of calcium per 100ml, subject to being extracted from pulses, cereals, nuts, seeds or any other type of plants and does not contain aerated substances.