Sign up for tax alert emails    GTNU homepage    Tax newsroom    Email document    Print document    Download document

June 27, 2022

UAE Federal Tax Authority issues public clarification on excise tax

Executive summary

On 21 June 2022, the United Arab Emirates (UAE) Federal Tax Authority (FTA) published a new Public Clarification EXTP007 (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

EY LLP (United States), Middle East Tax Desk, New York


The information contained herein is general in nature and is not intended, and should not be construed, as legal, accounting or tax advice or opinion provided by Ernst & Young LLP to the reader. The reader also is cautioned that this material may not be applicable to, or suitable for, the reader's specific circumstances or needs, and may require consideration of non-tax and other tax factors if any action is to be contemplated. The reader should contact his or her Ernst & Young LLP or other tax professional prior to taking any action based upon this information. Ernst & Young LLP assumes no obligation to inform the reader of any changes in tax laws or other factors that could affect the information contained herein.


Copyright © 2024, Ernst & Young LLP.


All rights reserved. No part of this document may be reproduced, retransmitted or otherwise redistributed in any form or by any means, electronic or mechanical, including by photocopying, facsimile transmission, recording, rekeying, or using any information storage and retrieval system, without written permission from Ernst & Young LLP.


Any U.S. tax advice contained herein was not intended or written to be used, and cannot be used, by the recipient for the purpose of avoiding penalties that may be imposed under the Internal Revenue Code or applicable state or local tax law provisions.


"EY" refers to the global organisation, and may refer to one or more, of the member firms of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients.


Privacy  |  Cookies  |  BCR  |  Legal  |  Global Code of Conduct Opt out of all email from EY Global Limited.


Cookie Settings

This site uses cookies to provide you with a personalized browsing experience and allows us to understand more about you. More information on the cookies we use can be found here. By clicking 'Yes, I accept' you agree and consent to our use of cookies. More information on what these cookies are and how we use them, including how you can manage them, is outlined in our Privacy Notice. Please note that your decision to decline the use of cookies is limited to this site only, and not in relation to other EY sites or Please refer to the privacy notice/policy on these sites for more information.

Yes, I accept         Find out more