Executive summary

On 8 April 2026, the State of Qatar announced the issuance of Law No. (2) of 2026 (Law No. 2), amending key provisions of the Excise Tax Law No. (25) of 2018 (Law No. 25).

The amendments, aimed at achieving public health objectives, introduce changes to the tax base determination on sweetened drinks based on sugar content, as well as the applicable statute of limitations and transitional compliance requirements.

Law No. 2, published in the Official Gazette on 7 April 2026, will take effect three months from its publication, i.e., on 6 July 2026.

The amendments impose new compliance obligations on businesses holding goods subject to excise tax (excise goods) for commercial purposes as of the effective date, including the submission of audited stock declarations within 90 days and settlement of excise tax within 30 days thereafter. The General Tax Authority (GTA) will define thresholds for what constitutes "commercial quantities," which businesses must monitor closely.

The amendments will necessitate adjustments in pricing strategies, product classification and internal systems to comply with enhanced excise tax and inventory regulations.

Detailed discussion

Background

Law No. 25 introduced excise tax in Qatar in line with the Unified Gulf Cooperation Council Excise Tax Agreement, targeting specific goods deemed harmful to human health. Law No. 25 applies to the importation, production, and stockpiling of excise goods and is administered by the GTA, together with its Executive Regulations.

Since Law No. 25's implementation, the GTA has continued refining the framework to address pricing manipulation, underreporting risks and public health considerations, particularly around sugar consumption.

Law No. 2 represents an expansion of the Excise Tax Regime, amending Law No. 25 both substantively and procedurally.

Highlights of the amendments

Taxation on sweetened drinks: Sweetened drinks are classified and taxed at varying rates, based on their total sugar content. The rates are as follows:

• Sweetened drinks with low sugar content (i.e., with less than 5 g of sugar per 100 ml): zero Qatari Rial (QAR0).
• Sweetened drinks with medium sugar content (i.e., between 5 g and 7.99 g of sugar per 100 ml): QAR0.77 per liter.
• Sweetened drinks with high sugar content (i.e., with at least 8 g of sugar per 100 ml): QAR1.06 per liter.
• Sweetened drinks containing only artificial sweeteners and no added sugar: QAR0

Extended statute of limitations: Tax evasion offenses are now subject to a five-year limitation period.

Stricter enforcement alignment: Excise tax evasion linked to customs smuggling may be prosecuted under customs legislation. Criminal proceedings for excise tax offenses require formal initiation by the GTA.

Public health allocation: 1% of the excise tax proceeds on sweetened drinks shall be allocated to the budget of the Ministry of Public Health for health awareness programs.

Implications

Businesses must prepare for revised tax base determination rules applicable on the sweetened drinks based on their sugar content, potentially requiring updates to pricing, product classification and reporting systems on these products.

The transitional compliance obligations necessitate timely submission of stock declarations and excise tax payments, emphasizing the need for robust inventory management and financial controls.