Tiered, sugar-based excise tax methodology to replace flat 50% rate
The Board of Directors of the Zakat, Tax and Customs Authority (ZATCA) approved amendments to certain provisions of the Executive Regulations of the Excise Tax, which will come into effect starting Jan. 1, 2026. 
The approved amendments include revising the methodology for calculating excise tax on sweetened beverages, so that the tax will be assessed based on the total sugar content in the sweetened beverage.
The amended methodology for calculating excise tax on sweetened beverages is based on applying tiered tax brackets according to the total sugar content per 100 ml of the ready-to-drink sweetened beverage that falls within each bracket, ZATCA said in a statement.
The new methodology will replace the current mechanism for imposing excise tax on sweetened beverages, which is based on a flat rate of 50% calculated on the retail selling price of the taxable sweetened beverage.
It noted that sweetened beverages refer to any product to which a source of sugar or other sweeteners is added and that is produced for consumption as a drink. This includes beverages in all forms, such as ready-to-drink products, concentrates, powders, gels, extracts, or any other form that can be converted into a beverage.
The new methodology for calculating excise tax on sweetened beverages based on total sugar content aims to promote public health and encourage reduced sugar consumption in sweetened beverages. This will be achieved by incentivizing producers and importers to offer consumer beverages with lower total sugar content, in line with international best practices.
The following table illustrates the new methodology that will be applied in the Kingdom starting Jan. 1, 2026:
New Methodology Applied in the Kingdom Starting Jan. 1, 2026 (SAR/L)
Tier
Excise Tax
First: Sweetened beverages containing artificial sweeteners only, with no added sugar
0.00
Second: Low-sugar sweetened beverages (less than 5 grams per 100 ml)
0.00
Third: Medium-sugar sweetened beverages (from 5 to 7.99 grams per 100 ml)
0.79
Fourth: High-sugar sweetened beverages (8 grams or more per 100 ml)
1.09
In October, The GCC Financial and Economic Cooperation Committee approved a new methodology for calculating the excise tax on sweetened beverages according to total sugar content in ready-to-drink beverages, Argaam data showed.
Tiered, sugar-based excise tax methodology to replace flat 50% rate
The Board of Directors of the Zakat, Tax and Customs Authority (ZATCA) approved amendments to certain provisions of the Executive Regulations of the Excise Tax, which will come into effect starting Jan. 1, 2026.
The approved amendments include revising the methodology for calculating excise tax on sweetened beverages, so that the tax will be assessed based on the total sugar content in the sweetened beverage.
The amended methodology for calculating excise tax on sweetened beverages is based on applying tiered tax brackets according to the total sugar content per 100 ml of the ready-to-drink sweetened beverage that falls within each bracket, ZATCA said in a statement.
The new methodology will replace the current mechanism for imposing excise tax on sweetened beverages, which is based on a flat rate of 50% calculated on the retail selling price of the taxable sweetened beverage.
It noted that sweetened beverages refer to any product to which a source of sugar or other sweeteners is added and that is produced for consumption as a drink. This includes beverages in all forms, such as ready-to-drink products, concentrates, powders, gels, extracts, or any other form that can be converted into a beverage.
The new methodology for calculating excise tax on sweetened beverages based on total sugar content aims to promote public health and encourage reduced sugar consumption in sweetened beverages. This will be achieved by incentivizing producers and importers to offer consumer beverages with lower total sugar content, in line with international best practices.
The following table illustrates the new methodology that will be applied in the Kingdom starting Jan. 1, 2026:
New Methodology Applied in the Kingdom Starting Jan. 1, 2026 (SAR/L)
Tier
Excise Tax
First: Sweetened beverages containing artificial sweeteners only, with no added sugar
0.00
Second: Low-sugar sweetened beverages (less than 5 grams per 100 ml)
0.00
Third: Medium-sugar sweetened beverages (from 5 to 7.99 grams per 100 ml)
0.79
Fourth: High-sugar sweetened beverages (8 grams or more per 100 ml)
1.09
In October, The GCC Financial and Economic Cooperation Committee approved a new methodology for calculating the excise tax on sweetened beverages according to total sugar content in ready-to-drink beverages, Argaam data showed.
