For most of the last decade a soft drink in a UAE office fridge was a simple procurement fact: whatever it cost the supplier, add 50 per cent excise, add 5 per cent VAT on top of that, and there was the landed price. Regular or diet made no difference — both were "sweetened beverages", both carried the flat rate, and the only real decision was whether to stock them at all.
That stopped being true on 1 January 2026. The UAE replaced the flat 50 per cent excise on sweetened drinks with a tiered volumetric model: a fixed amount of tax per litre, set by how much sugar the drink contains per 100 ml. A drink under the lowest threshold carries no excise. A drink over the highest carries the most. And a drink sweetened only with artificial sweeteners sits in the zero band.
For an office that buys by the case, this is not a footnote in a tax bulletin. It is the first time the fridge has had a price signal built into the sugar content, and it changes the answer to three questions every office manager has asked at some point: is the zero-sugar version actually cheaper, is there any point stocking the regular one, and should soft drinks be in the fridge at all.
The three tiers, and what they mean per can
The model links excise per litre to grams of sugar (and other sweeteners) per 100 ml. There are three bands:
- Under 5 g per 100 ml — AED 0 per litre. No excise. This band also covers drinks that contain only artificial sweeteners, or artificial sweeteners plus less than 5 g of sugar.
- 5 g or more but under 8 g per 100 ml — AED 0.79 per litre.
- 8 g or more per 100 ml — AED 1.09 per litre.
Translate that into the formats an office actually buys. A standard 330 ml can of regular cola carries roughly 10.6 g of sugar per 100 ml, so it sits in the top band: 0.33 litres × AED 1.09 is about 36 fils of excise per can, before VAT. The zero-sugar version of the same cola contains no sugar and is sweetened artificially, so it lands in the bottom band: zero excise. A 500 ml bottle of a regular lemon-lime soda at around 11 g per 100 ml carries about 55 fils; its zero-sugar twin carries nothing. A "light" or reduced-sugar soda reformulated to sit between 5 and 8 g per 100 ml carries 26 fils per 330 ml can.
Two things stand out. First, the gap between regular and zero-sugar is now real money — a case of 24 regular cans carries around AED 8.70 more excise than the same case in zero-sugar, and VAT is then charged on the higher figure. Second, the absolute numbers are smaller than the old flat rate for most products: under the 50 per cent model a can with a pre-tax cost of AED 1.50 carried 75 fils of excise regardless of sugar; under the new model the regular version carries about 36 fils and the zero-sugar version none. Regular soft drinks got slightly cheaper. Zero-sugar drinks got much cheaper. That is the whole design.
The excise tax guide for office beverages covers the wider system — including the fact that energy drinks were not moved into the tiered model and still carry the full 100 per cent rate whether or not they contain sugar, which is the reason the energy drinks buyer's guide treats them as a separate decision entirely.
The old "diet drinks are taxed anyway" argument is dead
Under the flat model there was a line every office manager eventually learned: the FTA treated anything with sweeteners as a sweetened beverage, so a "diet" or "zero" soft drink carried exactly the same 50 per cent as the regular one. The practical consequence was that there was no tax reason to prefer zero-sugar in the fridge. Offices that stocked it did so for health reasons, and offices that did not could point to the invoice.
That argument no longer holds. A drink containing only artificial sweeteners is explicitly in the AED 0 band. The zero-sugar can is now cheaper than the regular one by the full excise amount, and the health case and the cost case point the same way for the first time. If the fridge still holds regular cola "because the zero costs the same", the reason expired on 1 January.
The one thing to check is the label rather than the marketing name. "Zero sugar" is straightforward. "Light", "less sugar" and "reduced sugar" can land anywhere from the zero band to the middle band depending on the actual grams per 100 ml, and some fruit-flavoured sodas that read as light are still over 8 g. Producers and importers now have to hold a conformity certificate for the sugar and sweetener content of each drink, so the figure is on the nutrition panel and is the figure the tax is calculated on. Read that, not the front of the can.
What this does to a fridge the office has not looked at for a year
Most fridges were stocked under the old rules and have not been revisited. That means the typical office is holding a mix that made sense when tax was indifferent to sugar and does not make sense now: a regular cola, a regular lemon-lime, a regular orange soda, one zero-sugar cola because someone asked, and a flavoured sparkling water that is quietly in the 5 to 8 g band because it has sugar in it.
Run the same exercise the energy drinks guide recommends: count the fridge for a week, by product, before deciding anything. Three patterns come up almost every time.
The regular versions are drunk by a small group. As with energy drinks, consumption of sugared soft drinks in an office is concentrated — a handful of people account for most of the cans. That matters because the "we can't remove it, everyone drinks it" objection is usually wrong on the numbers, and because the group that does drink it is the one that will notice a swap to zero-sugar and either accept it or not.
The zero-sugar version runs out first. When both are in the fridge side by side, the zero-sugar line is often the one that empties by Wednesday, which tells you which one the office would pick if there were only one. The mixed stocking is a habit, not a preference.
Flavoured sparkling water is doing more damage than the cola. Sweetened flavoured sparkling water reads as the healthy option and is stocked as if it were plain water. It is a sweetened drink in the tiered model, it sits in a taxed band if it has sugar in it, and it is often the highest-volume line in the fridge. The sparkling water guide covers the case for plain sparkling plus a flavour station instead — unflavoured sparkling water is not a sweetened drink and carries no excise at all.
The reset that works: one of each, zero-sugar by default
The fridge that holds up over time is not the one with no soft drinks in it. Removing the category outright creates a vending-machine run at 3 pm and a low-level grievance that shows up in the next engagement survey. The fridge that works is narrower and deliberate.
One cola, zero-sugar. This is the line that matters most. It is the drink people mean when they say "a soft drink", it is the one that generates the most complaints when it goes, and the zero-sugar version is now the cheapest way to keep it. If the office is attached to a particular brand, keep that brand in its zero-sugar form.
One clear soda, zero-sugar. Lemon-lime or a similar profile, for the people who do not drink cola. Same logic.
Plain sparkling water, in volume. This is the real replacement for the sugared range. It meets the cold-and-fizz need that most cans are actually opened for, carries no excise, and sits comfortably next to a bowl of lemon and lime. Most offices find the sparkling line takes over half the fridge within a month of the reset.
Bottled cold brew or unsweetened iced tea. For the caffeine-shaped part of the 3 pm demand. The cold drinks and iced coffee guide covers the formats; unsweetened versions are outside the sweetened-beverage rules entirely.
Nothing in the 8 g band, unless it is a considered exception. A regular cola for guests in the boardroom fridge is a reasonable exception. A regular cola as the default fridge stock is not, because it is now the most-taxed soft drink on the shelf and there is a cheaper version of the same product.
The low-sugar office pantry guide makes the wider case for this shape — the point is not to police what people drink but to make the default the better option. Under the old tax the default was a coin toss. Under the new one it is not.
Re-pricing the line rather than absorbing it
The other change worth acting on is on the supplier side. Under the flat model a supplier's price list had one excise-inclusive price per product and the office had no reason to look further. Under the tiered model the same product in two sugar variants has two different excise components, and the invoice should reflect that.
Ask the supplier for the price list with excise shown as a separate line per SKU, or at least confirmation of which tier each product sits in. Most reputable UAE suppliers re-priced their sweetened ranges in January and passed the reductions through; some did not, and an office still paying a blended "soft drinks" rate that was set in 2025 is paying the old flat-rate assumption on drinks that no longer carry it. The pricing models guide covers how to read a managed-pantry price list line by line, and the cost-per-employee benchmarks give a sense of where the cold-drinks line should sit against the rest of the pantry.
It is also worth checking the budget line itself. Many 2026 pantry budgets were built in Q4 2025 on the old 50 per cent assumption. If the fridge has since moved to zero-sugar and plain sparkling, the excise component of the beverage line should have fallen materially, and the Q4 planning guide is the point at which that saving should be recognised rather than left as an unexplained underspend.
Who is affected most
The tiered model lands differently depending on the office.
A growth-stage floor in Dubai Marina, where the tenant profile already leans toward lower-sugar SKUs and plant-based options, mostly finds the fridge was already close to the right shape — the change is a price reduction on lines it was going to stock anyway. The same goes for most of the tech and agency floors in Dubai Internet City and the studios in Dubai Design District, where an open-counter fridge tends to be curated because it is on show.
A corporate or professional-services office with a high guest load — the DIFC and ADGM floors, and every tenant around the Dubai World Trade Centre during exhibition weeks — is the case where the boardroom exception matters. Guest-facing soft drinks are stocked for a visitor who did not choose the office's policy, and holding a regular cola for that purpose is a legitimate decision. The point is that it should be a boardroom decision, ordered per event, rather than the fridge default for the whole floor.
Industrial and operations sites — the manufacturing floors around Al Quoz and Mussafah, and the shift-work fridges the 24/7 workplaces guide describes — are usually the heaviest consumers of the regular sugared range, and are the offices where the excise saving from a zero-sugar swap is largest in absolute terms. They are also the offices where a swap is most likely to be noticed, which is an argument for doing it with a two-week overlap rather than overnight.
Running the swap without a revolt
The mechanics are simple and the sequencing is what matters.
- Count first. One week, by product, from the inventory records if the pantry is managed and from a clipboard if it is not.
- Tell people before the fridge changes. One short note: the tax rules changed, the fridge is moving to zero-sugar versions of the same drinks plus plain sparkling water, the regular version stays available for meetings. The reason is external and non-negotiable, which is easier to accept than a wellness initiative.
- Overlap for two weeks. Both versions in the fridge, with the zero-sugar facing forward and in larger quantity. Consumption shifts on its own.
- Remove the regular line from the standing order, not from the fridge. It runs out and is not replaced. Nobody has to throw anything away.
- Put the sparkling water where the cans were. An empty shelf is the thing that generates complaints; a full one does not.
- Re-count after a month and compare the excise component on the invoice.
Pair it with the summer hydration policy if the swap lands between May and September — the argument for plain water and sparkling over sugared cans is easiest to make when it is 44 degrees outside.
The short version
From 1 January 2026 UAE excise on sweetened drinks is charged per litre by sugar content: nothing under 5 g per 100 ml, AED 0.79 per litre between 5 and 8 g, AED 1.09 per litre at 8 g and above, and nothing for drinks sweetened only artificially. A zero-sugar soft drink now costs less than the regular version by the full excise amount, which removes the last reason to keep the sugared line as the fridge default. Count the fridge for a week, move to one zero-sugar cola, one zero-sugar clear soda and plain sparkling water in volume, keep a regular option for the boardroom only, and check the supplier has actually passed the tier pricing through.
MHO supplies UAE offices with the full cold-drinks range — plain and flavoured sparkling water, zero-sugar soft drinks, bottled cold brew and juices and waters — alongside the low-sugar snack lines that make the 3 pm can less necessary in the first place. Browse the full range by category, see every area we deliver to, or talk to us if you want the fridge counted and re-planned rather than simply restocked.
Frequently asked questions
How is excise tax on soft drinks calculated in the UAE in 2026? Since 1 January 2026 excise on sweetened beverages is a fixed amount per litre, set by the sugar and sweetener content per 100 ml: AED 0 per litre under 5 g, AED 0.79 per litre from 5 g to under 8 g, and AED 1.09 per litre at 8 g or more. Drinks containing only artificial sweeteners, or artificial sweeteners with less than 5 g of sugar, are in the zero band. VAT at 5 per cent is charged on the excise-inclusive price. This replaced the previous flat 50 per cent rate on all sweetened drinks.
Are zero-sugar soft drinks still taxed in the UAE? Not with excise. Under the old flat model a diet or zero drink was treated as a sweetened beverage and carried the same 50 per cent as the regular version. Under the 2026 tiered model a drink sweetened only with artificial sweeteners sits in the AED 0 per litre band, so a zero-sugar cola carries no excise at all. It still attracts 5 per cent VAT, as almost everything in a pantry does. Note that "light" or "reduced sugar" drinks can still contain enough sugar to fall into a taxed band — check the grams per 100 ml on the label.
Is it cheaper to stock zero-sugar or regular cola in an office? Zero-sugar, now by a clear margin. A 330 ml can of regular cola at roughly 10.6 g of sugar per 100 ml carries around 36 fils of excise; the zero-sugar version carries none, and VAT is then charged on the lower figure. Across a case of 24 that is close to AED 9 of difference before the supplier's margin. For an office that stocks several cases a week the annual gap is meaningful, and it comes on top of the health case that already favoured zero-sugar.
Should an office stop stocking soft drinks altogether? Usually not. Removing the category outright tends to push people to a vending machine or a nearby shop at 3 pm and creates a grievance that is not worth the saving. The shape that holds is narrower rather than empty: one zero-sugar cola, one zero-sugar clear soda, plain sparkling water in volume, and a caffeinated cold option such as bottled cold brew. Keep a regular sugared option for guests in the boardroom if the office hosts a lot of visitors, ordered per event rather than held as fridge stock.
Did the 2026 change affect energy drinks? No. Energy drinks were not moved into the tiered volumetric model and still carry the full 100 per cent excise rate whether or not they contain sugar, so a sugar-free energy drink is taxed identically to the regular one. That leaves energy drinks as by far the most expensive drink in the fridge per serve and is why they are best treated as a separate decision from the rest of the soft-drinks range.
