Lesson 2 — The tiered volumetric model
Four of the five excise goods are taxed ad valorem — as a percentage of a price. Sweetened drinks are not. They are taxed volumetrically, in dirhams per litre, and the rate per litre is decided by how much sugar the drink contains per 100 millilitres. Two products with identical prices and identical volumes can therefore carry different excise, and the same product reformulated to contain less sugar can move down a band or out of tax entirely. That is the policy working as intended.
Article 10(1) sets three bands. They are read on sugar content per 100 ml of the drink as consumed, and the boundaries are exact: the lower bound of each band is inclusive and the upper bound is not. Source: Cabinet Decision 197/2025, Art. 10(1).
| Sugar content | Rate |
|---|---|
| Less than 5 g per 100 ml | AED 0 per litre |
| At least 5 g and less than 8 g per 100 ml | AED 0.79 per litre |
| 8 g or more per 100 ml | AED 1.09 per litre |
A drink sweetened only with artificial sweeteners is at AED 0 per litre, and so is a drink containing artificial sweeteners together with less than 5 g of sugar per 100 ml. Note what the first band is and is not: it is a rate of zero, not an exclusion from the excise goods list. The product is still an excise good, it still belongs in a category, it still appears on a declaration, and it still has to be evidenced if the FTA asks — it simply computes to nothing.
A warning that will save you a penalty. The FTA's own tiered-volumetric web page shows AED 0.97 for the middle band, in both its English and its Arabic versions. Cabinet Decision 197/2025 Art. 10(1) says AED 0.79. Teach, configure and file AED 0.79, and cite the Cabinet Decision if anyone challenges you. This matters in both directions: you will overstate your liability if you take the figure from the web page, and you will be asked to explain the difference if a reviewer takes it from there.
Here is the arithmetic on one consignment. Marina Beverages Trading LLC imports three products in January 2026: 12,000 units of Marina Cola in 330 ml cans, 4,800 units of Citrus Fizz in 500 ml bottles, and 4,800 units of Palm Sparkling in 250 ml cans. Convert each to litres first — 12,000 × 0.33 is 3,960.00 litres, 4,800 × 0.50 is 2,400.00 litres, 4,800 × 0.25 is 1,200.00 litres — then apply each product's own band.
| Product | Sugar (g/100 ml) | Litres | Rate (AED/L) | Excise (AED) |
|---|---|---|---|---|
| Marina Cola 330 ml | 10.6 | 3,960.00 | 1.09 | 4,316.40 |
| Citrus Fizz 500 ml | 6.2 | 2,400.00 | 0.79 | 1,896.00 |
| Palm Sparkling 250 ml | 3.4 | 1,200.00 | 0.00 | 0.00 |
| Total | 7,560.00 | 6,212.40 |
Check it yourself, because that is the fastest way to trust a report. 3,960.00 at 1.09 is 4,316.40. 2,400.00 at 0.79 is 1,896.00. Palm Sparkling is under 5 g per 100 ml, so it is in the first band and computes to nothing. The three lines sum to AED 6,212.40, and that is the sweetened-drinks figure that will appear on the January return in Lesson 8.
Now price the mistake. Had Citrus Fizz been rated at the AED 0.97 shown on the FTA web page, its line would read 2,400.00 at 0.97, which is AED 2,328.00 — an overstatement of AED 432.00 on a single product in a single month. Multiply that by a real catalogue and twelve months and the drift is material, and it is the kind of error that is very hard to find later because every individual figure looks plausible.
The failure mode: the rate living somewhere other than the system. Rates copied into a spreadsheet, a pricing sheet or a customs broker's template go stale silently, and nobody notices until a reconciliation fails. In Odoone the band rates sit on the excise category and the sugar figure sits on the product, so a rate change is one edit in one place. Keep it that way, and when you check the numbers, check them against the Cabinet Decision rather than against whichever page a search engine returns first.