UAE Federal Tax Authority issues public clarification on excise tax

Local contact

EY Global

27 Jun 2022
Subject Tax Alert
Categories Indirect Tax
Jurisdictions United Arab Emirates

Executive summary

On 21 June 2022, the United Arab Emirates (UAE) Federal Tax Authority (FTA) published a new Public Clarification EXTP007 (pdf) (Clarification) on excise goods. The Clarification sets out the scenarios where relief from excise tax may be granted for excise goods that are found to be deficient, shortage, considered as wastage, or where goods are intended to be destroyed.

Detailed discussion

Cabinet Decision No. 37 of 2017 on the Executive Regulation of the Federal Decree-Law No. 7 of 2017 on Excise Tax (Executive Regulation) considers “deficiency,” “shortage” or “wastage” of excise goods when located within a designated zone, as having been released for consumption and therefore subject to excise tax.

However, as an exception to the above rule, the Executive Regulation allows for relief to be granted from accounting for, filing and payment of, excise tax on goods that are located within an excise tax designated zone in certain scenarios. The Clarification lists these scenarios and explains the process to be followed by the warehouse keeper and the taxable person to obtain the relief.

Scenarios and process where relief can be granted by the FTA

Deficiency, shortage, and wastage of excise goods
  • The FTA should be notified by the warehouse keeper, responsible for the excise goods, within 30 days of discovering the deficiency in, or shortage and wastage of, the excise goods.

  • The FTA accepts that the deficiency or shortage is due to a legitimate cause (e.g., force majeure, natural shortage and wastage, and shortage and wastage during production), and then grants the relief.

Disposal of excise goods
  • The taxable person who intends to dispose of excise goods located within a designated zone, obtains prior approval from the FTA.

  • The FTA may wish to inspect the goods prior to granting its approval to apply the relief.

In both scenarios the warehouse keeper needs to provide sufficient proof to the FTA of the circumstances leading to the deficiency, shortage, wastage or why the goods need to be disposed of.


Taxable persons who produce or store excise goods within a designated zone, should comply with the process outlined by the FTA, in coordination with the warehouse keeper, to avail relief from accounting for excise tax on the deficient, shortage and wastage or when excise goods are intended to be destroyed.


For additional information with respect to this Alert, please contact the following:

Ernst & Young Consulting LLC, Dubai
  • Aamer Bhatti, MENA Indirect Tax Leader
  • Pascal Cange, Global Trade
  • Mahmood Abu Ghueleh, Indirect Tax
  • Elie Moussan, Business Tax Advisory
  • Samer Nouayhid, Indirect Tax
EY LLP (United States), Middle East Tax Desk, New York
  • Asmaa Ali

For a full listing of contacts and email addresses, please click on the Tax News Update: Global Edition (GTNU) version of this Alert.