Federal Decree by Law No. (7) of 2017 Concerning Excise Tax (tax law)

Article (1)  
For the purpose of applying the provisions of this Decree -Law, the following words and 
expressions shall have the meanings assigned thereto respectively, unless the context requires otherwise:
  
The State  : The United Arab Emirates . 
The Minister  : The Minister of Finance.  
The Authority  : The Federal Tax Authority.  
The Tax  : The Excise Tax.  
Excise Goods  : Goods to be defined as taxable goods by a Cabinet resolution upon the 
proposal of the Minister.  
Importation  : Brining goods or services into the State from abroad.  
Exportation  : The departure of the goods from the State.  
Person  : A natural or legal person.  
Taxable 
Person  : Each person that is, or ought to be, registered for the tax purposes, 
pursuant to the provisions of this Decree -Law.  
Designated 
Area  : Any fenced area intended to be a free zone and cannot be entered or 
exited except through a designated road, and any area identified by the 
Authority as being subject to the supervision of a warehouse keeper, in 
accordance with the provisions of the Execut ive Regulations of this 
Decree -Law.   
Federal Decree by Law No. (7) of 2017 on Excise Tax  3 
 Warehouse Keep-
er : Any person who is approved and registered at the Authority to 
supervise a designated area in accordance with the provisions of the 
Executive Regulations of this Decree -Law.  
Tax Registr ation  : A procedure under which a taxable person or the legal representative 
thereof registers for the tax purposes at the Authority.  
Tax Registration 
Number (TRN)  :  A unique number assigned by the Authority to each person regist ered 
for the tax purposes.  
Registrant  : A taxable person holding a Tax Registration Number.  
Importer  : The person who acts as the importer of excise goods on the date of 
importation for the purposes of customs clearance.  
Tax Return  : The information and data specified for the tax purposes and provided 
by the taxable person in accordance with the form prepared by the 
Authority.  
Business  : Any activity that is practiced on an ongoing, regular and independent 
basis by any person and in any place and involves or may involve 
trading in excise goods.  
Refundable Tax  : The paid amounts that may be refunded by the Authority to the 
person, in accordance with the provisions of this Decree -Law.  
Due Tax  : The tax that is calculated and levied under the provisions of this 
Decree -Law.  
Payable Tax  : The tax which becomes due  to be paid to the Authority.  
Deductible Tax  : The tax paid, or deemed to have been paid, by the taxable person, 
which may be deducted by the taxable person under the provisions of 
this Decree -Law.  
Tax Period  : A specific period for which the payable tax shall be calculated and paid.  
Administrative 
Fines  : Amounts to be imposed on the person by the Authority for violating 
the provisions of this Decree -Law or the Tax Procedures Law.  
Administrative : A decision issued by the Authority on due administrative fines.   
Federal Decree by Law No. (7) of 2017 on Excise Tax  4 
 Fine Assessm ent 
Stockpiler  : A person who owns excise goods and cannot evidence that such goods 
have been previously subject to the tax under the conditions stipulated 
in the Executive Regulations of this Decree -Law.  
Customs Legisla-
tion  : Federal and local legislation regulating customs in the State.  
Applying States  : The GCC States, which apply the Tax Law under issued legislation.  
Tax Evasion  : The person’ s use of illegal means which cause reducing the amount of 
the due tax, the non -payment thereof, or the refund of a tax that such 
person is not entitled to refund.  
Tax Audit  : An action performed by the Authority to audit business records, or any 
informat ion, data or goods related to a person to verify the fulfillment 
of its obligations, pursuant to the provisions of this Decree -Law or the 
Tax Procedures Law.  
Tax Assessment  : The Tax Assessment as defined in the Tax Procedures Law.  
Voluntary Disclo-
sure  : A form prepared by the Authority by which a taxpayer notifies the 
Authority of any errors or omissions in the Tax Return, Tax Assessment 
or tax refund application, pursuant to the provisions of the Tax 
Procedures Law.  
Tax Procedures 
Law  : Federal Law No.  (7) of 2017 on Tax Procedures, as amended, and any 
federal law superseding the same.  
 
Chapter Two  
Application, Scope and Calculation of the Tax

Article (2) 
Application and Scope of the Tax  
 
1. The provisions of this Decree -Law shall apply to the excise goods determined under a  
Federal Decree by Law No. (7) of 2017 on Excise Tax  5 
 resolution issued by the Cabinet, upon the proposal of the Minister.  
2. The tax shall be levied on the following activities related to the excise goods:  
a. The product ion of excise goods in the State if such production is made in the course 
of exercising the business;  
b. The importation of excise goods;  
c. The release of excise goods from a designated area;  
d. Stockpiling excise goods in the State if such goods are stockpiled in the course of 
exercising the business.

Article (3)  
Calculation of the Tax  
The Cabinet shall issue, upon the proposal of the Minister, a resolution determining the tax 
rates to be levied on the excise goods and the method of calculating the excise price, 
provided that the tax rate to be levied on such goods does not exceed (200%)  of the excise 
price of the goods.

Article (4)  
Tax Obligations  
1. The due tax shall be charged on the following:  
a. The person practicing any of the activities set out in Clause (2) of article (2) of this 
Decree- Law;  
b. The person participating in any of the activities set out in Clause (2) of article (2) of 
this Decree -Law if the person who practices the activity fails to meet the tax 
obligation, in accordance with what is determined by the Executive Regulations of 
this Decree- Law;  
c. The warehouse keeper, where excise goods are released from a designated area and the payable tax is not previously paid, in accordance with what is determined by the 
Executive Regulations of this Decree -Law.  
2. The following persons shall be excluded from the provisions of Clause (1) of this Article:  
a. The person who imports excise goods whose value is less than the value prescribed  
Federal Decree by Law No. (7) of 2017 on Excise Tax  6 
 by the Customs Legislation, if such excise goods are carried by the person on an 
international trip and for non -commercial purposes;  
b. The stockpiler in case of meeting the conditions stipulated by the Executive Regulations of this Decree Law.  
  
Chapter Three  
Tax Registration and Cancellation thereof

Article (5)  
Tax Registration  
1. Any Person shall be prohibited from practicing any activity mentioned in Clause (2) 
of article (2) of this Decree -Law before being registered for the tax purposes, in 
accordance with the provisions of this Decree -Law.  
2. Without prejudice to the provisions of Clause (1) of this Article, the person liable for 
the due tax, pursuant to article (4) of this Decree -Law, shall submit to the Authority 
an application for tax registration, pursuant to the provisions of the Tax Procedures 
Law, within thirty (30) days as o f the end of any month during which such Person 
practices or intends to practice the activities set forth in Clause (2) of article (2) of this Decree -Law, or as of the date of entry into force of this Decree -Law, whichever 
comes later.  
3. The Executive Reg ulations of this Decree -Law shall determine the effective date of 
the tax registration referred to in this Article.

Article (6) 
Exemption from the Registration  
1. Notwithstanding the provisions of Clause (1) of article (5) of this Decree -Law, the 
Authorit y may exempt any person from the tax registration when the tax becomes 
due, pursuant to Paragraphs (b) and (c) of Clause (2) of article (2) of this Decree -Law, 
if the Authority finds that such person will not import excise goods on a regular basis, in acco rdance with what is determined by the Executive Regulations of this 
Decree- Law.   
Federal Decree by Law No. (7) of 2017 on Excise Tax  7 
 2. Whoever is exempted from the tax registration under Clause (1) of this Article shall 
notify the Authority of any changes, which may make him subject to the tax in 
accordance  with the provisions of this Decree -Law, within the time limits and under 
the procedures determined by the Executive Regulations of this Decree -Law.  
3. A person that carries out im portation for purposes other than the practice of business 
shall be exempt from the tax registration, without prejudice to the obligation to pay the tax due for such importation.  
4. The person’s exemption from the registration, pursuant to the provisions o f this 
Article, shall not prejudice its obligation to pay any due tax or administrative fine 
under the provisions of this Decree -Law or any other law.

Article (7) 
Cancellation of Tax Registration  
The registrant shall submit to the Authority an application for cancellation of tax registration 
if he is no longer liable for the tax in accordance with the provisions of article (4) of this 
Decree- Law within the time limits defined under the Executive Regulations of this 
Decree- Law.

Article (8) 
Registration as Warehouse Keepers  
1. Each person who operates or intends to operate a designated area shall apply for 
registration as a warehouse keeper in accordance with the provisions of the Executive 
Regulations of this Decree -Law.  
2. The Executive Regulations of this Decree -Law shall determine the effective date of 
registration referred to in Clause (1) of this Article.  
3. Any person shall be prohibited from acting as a warehouse keeper before being 
registered in accordance with the provisions of this Article.  
  
 
 
  
Federal Decree by Law No. (7) of 2017 on Excise Tax  8

Article (9) 
Procedures, Controls and Conditions of Tax Registration and Cancellation 
thereof  
The Executive Regulations of this Decree -Law shall determine the procedures, controls and 
conditions of the tax registration, canc ellation thereof and rejection of applications for tax 
registration and its cancellation.  
  
Chapter Four  
Rules of Tax Payment and Exemption therefrom

Article (10)  
Date of Tax Calculation  
The tax shall be calculated according to the following dates:  
 
1. The date of importing the excise goods;  
2. The date on which the excise goods are acquired by the stockpiler, but if such acquisition 
occurs prior to the date of entry into force of this Decree -Law, the date of tax calculation 
shall be the date of entry into force of this Decree -Law.  
3. As an exception to the two cases set forth in Clauses (1) and (2) of this Article, the tax 
shall be calculated on the date when the excise goods are offered for consumption, in accordance with the provisions of the Execu tive Regulations of this Decree -Law.

Article (11)  
Tax -Inclusive Prices  
The declared prices of excise goods shall, upon sale, include the tax. The Executive Regulations of this Decree -Law shall determine the cases where prices do not include the 
tax.

Article (12)  
Exemption from the Tax 
1. Excise goods that are exported shall be exempted from the tax.   
Federal Decree by Law No. (7) of 2017 on Excise Tax  9 
 2. The Executive Regulations of this Decree -Law shall establish the conditions and controls 
for exempting from the tax referred to in Clause (1) of th is Article.  
 
Chapter Five  
Designated Areas

Article (13)  
Designated Area  
1. The designated area that meets the conditions established by the Executive Regulations 
of this Decree -Law shall be treated, for the tax purposes, as being outside the State.  
2. Notwithstanding the provisions of Clause (1) of this Article, the Executive Regulations of 
this Decree -Law shall determine the conditions under which the business practiced 
within the designated area shall be treated as being practiced inside the State.

Article (14)  
Transfer of Excise Goods in Designated Areas  
1. The excise goods may be transferred from one designated area to another without any 
tax due thereon.  
2. The Executive Regulations of this Decree -Law shall determine the procedures and 
conditions of the transfer of excise goods from and to a designated area and the method 
of maintaining, storing,  and processing such goods.  
 
Chapter Six 
Calculation of the Due Tax

Article (15)  
Calculation of the Tax  
The payable tax levied on the taxable person for any tax period shall be calculated as the tax 
due from the taxable person for such tax period less the total deductible tax as calculated in 
accordance with the provisions of article (16) of this Decree -Law.  
   
Federal Decree by Law No. (7) of 2017 on Excise Tax  10

Article (16)  
Deductible Tax  
1. The deductible tax shall consist of the following:  
a. The tax paid on the excise goods that have been exported;  
b. The tax paid on the excise goods that have become a component of another excise 
goods on which the tax has become, or becomes, due;  
c. Amounts paid to the Authority by mistake.  
2. The Executive Regulations of this Decree -Law shall establish the conditions and controls 
of deducting the tax in the cases mentioned in Clause (1) of this Article.  
 
Chapter Seven  
Tax Period, Tax Return and Tax Payment

Article (17)  
Tax Period  
The Executive Regulations of this Decree -Law shall determine the tax period and the 
exceptional cases in which the Authority may amend the tax period.

Article (18)  
Tax Return  
The taxable person shall submit to the Authority the tax return at the end of eac h tax period, 
within the time limits and in accordance with the procedures determined by the Executive 
Regulations of this Decree -Law.

Article (19)  
Payment of the Tax  
1. The taxable person shall pay the payable tax on the date of submitting the tax return , 
in accordance with the provisions of article (18) of this Decree -Law and as per the 
procedures to be determined by the Authority . 
2. Any person exempted from the registration under Clause (1) or Clause (3) of Article  
Federal Decree by Law No. (7) of 2017 on Excise Tax  11 
 (6) of this Decree -Law shall pay the due tax at the time of importing excise goods . 
3. Any person that receives any amount as a tax or any amount invoiced shall pay it to 
the Authority. Such amount shall be subject to the same treatment established for 
the due tax under the provisions of this Decree -Law.  
 
Chapter Eight  
Carrying forward the Excess Refundable Tax

Article (20)  
Excess Refundable Tax  
1. The taxable person shall carry forward any excess refundable tax to the subsequent tax 
periods and offset such excess against the payable tax or any administrative fine 
imposed pursuant to the provisions of this Decree -Law or the Tax Procedures Law  in the 
subsequent tax periods until such excess is fully utilized, in the following cases:  
a. If the deductible tax of the taxable person, pursuant to the provisions of article (16) of this Decree -Law, exceeds the due tax for the same tax period;  
b. If the tax paid by the taxable person to the Authority exceeds the payable tax in accordance with the provisions of this Decree -Law.  
2. If there is any excess for any tax period after being carried forward for a period of 
time, the taxable person may sub mit to the Authority an application for claiming a refund of 
such excess in accordance with the periods and procedures determined by the Executive 
Regulations of this Decree -Law.

Article (21)  
Tax Refund in Special Cases  
The Authority may, based on an app lication to be submitted thereto, may refund the tax to 
the following:  
1. Foreign governments, international organizations and diplomatic bodies and missions, 
for the tax paid thereby while performing their official activities, in accordance with the 
conditions, controls and procedures determined by the Executive Regulations of this  
Federal Decree by Law No. (7) of 2017 on Excise Tax  12 
 Decree- Law, subject to reciprocity.  
2. The person who is registered in an applying state if he pays the due tax in the State and 
then exports the excise goods to an applying state, in accordance with the conditions, 
controls and procedures determined by the Executive Regulations of this Decre e-Law.  
3. Any persons or categories to be determined under a Cabinet resolution, upon the 
proposal of the Minister.  
 
Chapter Nine  
Violations and Penalties

Article (22)  
Administrative Fines Assessment  
Subject to the provisions of Tax Procedures  Law, the Authority shall issue an Administrative 
Fine Assessment to the taxable person and notify him thereof within five (5) working days as 
of the date of issuance, in case of committing any of the following violations:  
1. Failure by the taxable person to  display the tax -inclusive prices in accordance with the 
provisions of article (11) of this Decree -Law;  
2. Failure to adhere to the conditions and procedu res to be followed for transferring the 
excise goods from a designated area to another and the mechanism of maintaining, 
storing and processing the same;  
3. Failure by the taxable person to provide the Authority with the price lists of excise 
goods produ ced, imported or sold thereby, in accordance with the provisions of the 
Executive Regulations of this Decree -Law.

Article (23)  
Tax Evasion  
Without prejudice to the cases of tax evasion set forth in the Tax Procedures Law,  a person 
shall be deemed to have committed a crime of tax evasion and shall be punished pursuant 
to the Tax Procedures Law if he commits any of the following : 
1. Bringing or attempting to bring excise goods into or out of the State without paying the  
Federal Decree by Law No. (7) of 2017 on Excise Tax  13 
 due tax in whole or in part;  
2. Producing, transferring, acquiring, storing, transporting or receiving excise goods for 
which the due tax has not been paid with the intention of evading payment of the due 
tax; 
3. Placing false labels on exc ise goods, in violation of the provisions of Clause (2) of Article 
(24) of this Decree -Law, with the intention of evading payment of the due tax or 
receiving an unjustified refund;  
4. Submitting any false, counterfeit or fabricated documents, returns or records, with the 
intention of evading payment of the due tax or receiving an unjustified refund.  
 
Chapter Ten  
General Provisions

Article (24)  
Record Keeping and Evidentiary Requirements  
1. Without prejudice to the provisions r elated to record keeping contained in any other 
law, every taxable person shall keep the following records:  
a. Records of all excise goods produced, imported or stockpiled;  
b. Records of excise goods exported and evidence of such exportation;  
c. Records of stock levels, including details of lost or destroyed items;  
d. A tax record that shall contain the following information:  
i. The due tax on the imported excise goods;  
ii. The due tax on the produced excise goods;  
iii. The due tax on the stockpiled excise goods;  
iv. The deductible tax in accordance with the provisions of article (16) of this 
Decree- Law.  
2. The Cabinet shall, upon the proposal of the Minister, identify the excise goods on which 
labels indicating that  the tax has been paid shall be placed and the relevant conditions 
and procedures.  
3. The Executive Regulations of this Decree -Law shall determine the periods, 
conditions and controls necessary for keeping the records set out in Clause (1) of this Article.   
Federal Decree by Law No. (7) of 2017 on Excise Tax  14

Article (25)  
Tax Registration Number  
The taxable person or any person authorized in writing thereby shall refer to the Tax 
Registration Number in all correspondences and dealings with the Authority, tax return, and 
any other document related to the tax.  
 
Article (25) BIS 
Statute of Limitations  
1. Notwithstanding the cases set forth in Clauses (2), (3), (6) and (7) of this Article, the Authority may not carry out a tax audit or issue a tax assessment for the taxable 
person following the lapse of (5) five years from the end of the relevant tax period.  
2. The Authority may carry out a tax audit or issue a tax assessment for the taxable 
person following the lapse of (5) five years from the end of the relevant tax period if 
he is notified that the procedures of such tax audit have been commenced before the 
lapse of the five -year period; provided that the tax audit or the tax assessment, as the 
case may be, is carried out within (4) four years from the date of notification of the 
tax audit.  
3. The Authority may carry out a tax aud it or issue a tax assessment following the lapse 
of (5) five years from the end of the relevant tax period if such tax audit or tax 
assessment is related to a voluntary disclosure provided in the fifth year of the end of 
the tax period; provided that the t ax audit or the tax assessment, as the case may be, 
is carried out within one year from the date of providing the voluntary disclosure.  
4. The Cabinet may, at the Minister’s proposal, issue a resolution adjusting the time 
limit specified for completing the  tax audit or issuing the tax assessment, pursuant to 
Clauses (2) or (3) of this Article.  
5. No voluntary disclosure shall be provided following the lapse of (5) five years from the expiry of the relevant tax period.  
6. In case of tax evasion, the Authorit y may carry out a tax audit or issue a tax 
assessment within (15) fifteen years from the end of the tax period within which the 
tax evasion occurred.   
Federal Decree by Law No. (7) of 2017 on Excise Tax  15 
 7. In case of failure to perform the tax registration, the Authority may carry out a tax 
audit or issue a tax assessment within (15) fifteen years from the date on which the 
taxable person would have been required to perform the tax registration.  
8. The statute of limitations set out in this Article shall be interrupted for any of the 
reasons set forth in Fede ral Law No. (5) of 1985 Promulgating the Civil Transactions 
Law, or any other federal law superseding the same.  
 
Chapter Eleven  
Final Provisions

Article (26)  
The Executive Regulations  
The Cabinet shall, upon the proposal of the Minister, issue the Executive Regulations of this Decree- Law.

Article (27)  
Revenue Sharing  
The tax revenues and administrative fines to be collected in accordance with the provisions 
of this Decree- Law shall be subject to sharing between the Federal Government and the 
Emirates' Governments, pursuant to the provisions of Federal Decree- Law No. (13) of 2016 
on the Establishment of the Federal Tax Authority.

Article (28)  
Matters not stipulated herein shall be subject to the provisions of the Tax Procedures Law .

Article (29)  
Repeal of Conflicting Provisions  
Any text or provision inconsistent or conflicting with the provisions of this Decree -Law is 
hereby repealed.  
  
Federal Decree by Law No. (7) of 2017 on Excise Tax  16

Article (30)  
Publishing and Entry into Force  
This Decree -Law shall be published in the Official Gazette and shall enter into force as of 1st 
October 2017.  
  
 
 
  
 
 
 
Khalifa bin Zayed Al Nahyan  
President of the United Arab Emirates  
 
 
Issued by us in the Presidential Palace in Abu Dhabi  on: 
Corresponding to 17 August 2017 AD.  
On: 01 Dhul Qi'dah 1438 AH.