Are Caffeinated Drinks Energy Drinks for Excise Tax?

Coffee has caffeine but is not an energy drink — Article 6 asks how the drink is marketed and sold.

Excise classification is mechanical: does the product fall inside one of the five categories in Article 2 of Cabinet Decision No. 197 of 2025, as defined in Articles 3 to 7? The FTA can also require lab tests or documents to prove a product's ingredients (Article 13) — and where evidence is not provided in time, the Authority may treat the product as an excise good until proven otherwise. When in doubt, the safe route is an FTA clarification before the goods ship, not an argument after they are seized.

Tobacco and tobacco products (Article 3): everything in Chapter 24 of the GCC Common Customs Tariff, including electrically-heated cigarettes — except products exclusively intended to help people quit smoking.

Liquids for electronic smoking devices (Article 4): all liquids used in such devices, whether or not they contain nicotine.

Electronic smoking devices and tools (Article 5): all devices and tools and the like, whether or not they contain nicotine or tobacco.

Energy drinks (Article 6): beverages marketed or sold as energy drinks with stimulant substances, plus convertible concentrates, powders, gels and extracts.

Sweetened drinks (Article 7): drinks with added sugar, artificial or other sweeteners — with express exclusions for 75%+ milk drinks, baby food, medical and special-dietary beverages, and restaurant-prepared open-cup servings.

Borderline products are where excise disputes are born. If the classification of your product is genuinely unclear:

1. Check the customs codes the Minister specifies for the category — the code is often decisive.
2. Gather ingredient evidence: lab reports for sugar content, composition sheets for devices and liquids.
3. Seek an FTA clarification before importing or producing — a written position beats a warehouse argument.
4. Register protectively if the activity might be excise-relevant: the AED 10,000 late-registration penalty dwarfs the cost of an unnecessary registration.

Never assume a clever product name moves the goods outside the law. The FTA looks at what the thing is, not what the box calls it.

Products rarely travel alone: if you handle caffeinated drinks generally, you probably handle neighbours that classify differently. Vape businesses often carry devices (Article 5), liquids (Article 4) and accessories (usually outside excise) in the same shipment — each needs its own classification and its own line on the return. Drinks businesses mix sweetened drinks (per-litre bands), energy drinks (100%) and excluded products like plain water or qualifying milk drinks.

Map the full SKU list against the five categories before the first import, not after the FTA asks. A single classification matrix — SKU, category, article, customs code, evidence — prevents the most common multi-product error: filing everything under one category because the shipment arrived together.

A taxable verdict triggers the full excise lifecycle: registration on EmaraTax before the first import, production or stockpiling; the tax paid at customs clearance, at production or on release for consumption; monthly returns and payment within 15 days of each month-end (nil returns in quiet months); five-year record retention; and — for sweetened drinks — an accepted lab report behind the sugar band.

Penalties for getting this wrong include AED 10,000 for late registration, AED 1,000/2,000 for late filing and 14% per annum on late payment. A classification opinion from a specialist before launch is far cheaper than any of them.