Saudi excise tax on sweetened drinks now based on sugar content

Country reference

• Country: Saudi Arabia (Wave 1 expansion country)
• Authorities: Zakat, Tax and Customs Authority (ZATCA)
• Topic: Excise tax method for sweetened beverages
• Key date: Effective 1 January 2026 (announced 30 December 2025)
• Law: Excise Tax Implementing Regulation, as amended

What changed

ZATCA’s Board approved amendments to the Excise Tax Implementing Regulation. From 1 January 2026, the tax on sweetened beverages moved from a flat 50% of the retail selling price to a tiered method based on total sugar content per 100 ml of the ready-to-drink product. The change follows a decision of the GCC Financial and Economic Cooperation Committee.

Scope

• Ready-to-drink beverages, concentrates, powders, gels, extracts and any other form that can be made into a drink.
• Concentrates and powders are measured on the prepared drink.

The tiers

• Drinks with no added sugar, sweetened only with artificial sweeteners.
• Less than 5 grams of sugar per 100 ml.
• 5 to 7.99 grams per 100 ml.
• 8 grams or more per 100 ml.

The tax amount for each tier is set in ZATCA’s published schedule; check the official figures before pricing.

Why it matters

• Low-sugar products can carry less tax than before, while high-sugar products may carry more.
• Price is no longer the base, so premium and cheap drinks in the same tier pay the same.
• Producers and importers need lab-tested sugar data per product.

What to do now

• Classify every product code by tier, using certified sugar content.
• Update excise registration data, price lists and margin models.
• Consider reformulation where a product sits just above a tier boundary.

Our take

The change rewards product design rather than pricing. Finance and product teams should look at the range together: a small cut in sugar can move a product into a lower tier across the GCC.