UAE: Excise tax guidance

The tax authority of the United Arab Emirates (UAE) issued excise tax guidance.

The tax authority of the United Arab Emirates (UAE) issued excise tax guidance.

The tax authority of the United Arab Emirates (UAE) issued the following excise tax guidance:

  • New excise tax user guide for clearing companies, focusing on consumption, import and release transactions
  • Clarification EXTP008 about the calculation of financial guarantees for purposes of excise tax in designated zones
  • Minor changes to a number of existing excise tax guides

User guide for clearing companies

The new excise tax user guide aims to support clearing companies by answering the following key questions:

  • How to suspend excise tax upon import
  • How to release suspended excise tax for goods that have been exported
  • How to declare consumed goods
  • What are the excise tax suspension compliance obligations

The user guide also provides a detailed explanation of what type of declaration clearing companies must complete and submit to the tax authority, and how and when such declarations must be completed and submitted. In particular, the user guidance confirms:

  • Clearing companies are required to declare excise goods that are to be imported into the UAE on behalf of the importer.
  • Clearing companies are also required to declare the excise goods that are consumed in the UAE.

Clarification EXTP008

All warehouse keepers are required to provide a financial guarantee for each designated zone. The amount of the financial guarantee will be decided based on the taxable person’s compliance history. The tax authority has defined a four-step process to calculate the amount of the financial guarantee:

  • Step 1: Determine the guarantee based on excise tax due on the average month-end stock over a period of 12 months
  • Step 2: Calculation of the financial guarantee percentage based on multiple factors
  • Step 3: Apply the rate calculated in step 2 to step 1 to decide the preliminary financial guarantee amount
  • Step 4: Determining the guarantee amount with respect to the specific designated zone by adjusting the preliminary guarantee amount if either the minimum or maximum threshold applies
    • The minimum financial guarantee amount is AED 175,000.
    • The financial guarantee is capped at AED 25 million (subject to specific conditions).

Minor changes to existing guides

The tax authority published an updated version of the non-registered excise stock movement user guide previously published in December 2020, which shows a step-by-step approach to how warehouse keepers must declare the stock movement of excise goods. In the new version, there are only minor changes on how to navigate the e-Service portal (e.g., added illustration on how to search for non-registered stock movement declaration).

The tax authority also released a new version of the excise tax import declaration user guide with only minor technical system updates (e.g., tax period/date drop list, search button, etc.).

Read a September 2022 report prepared by the KPMG member firm in the United Arab Emirates


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