FTA publishes Excise Tax Public Clarification on stockpiling of Excise goods

Registration is open for eligible entities

The United Arab Emirates (UAE) Federal Tax Authority (FTA) has published Excise Tax Public Clarification EXTP003 on stockpiling of Excise goods.

Who is this information intended for?

Businesses in the UAE which hold stock of Excise goods or expect to hold stock of Excise goods on 1 December 2019.


EXTP003 explains the Excise Tax obligations for businesses which expect to hold stock of the following Excise goods for business purposes on 1 December 2019 (the date of expansion of the UAE Excise Tax regime):

  • Sweetened drinks;
  • Electronic smoking devices and tools;
  • Liquids used in electronic smoking devices and tools; and
  • Tobacco products which have been subject to Excise Tax at a price lower than the minimum Excise Price introduced on such products by Cabinet Decision No. 55 of 2019 on the Excise Price for Tobacco Products.

EXTP003 provides guidance that is more detailed than previously available regarding stockpiling of Excise goods. It provides valuable insight into the FTA’s approach and expectations in terms of business’ Excise Tax accounting and reporting obligations.

As the new guidance makes clear, any business which holds stock of the above products could potentially be considered a stockpiler for Excise purposes and be subject to Excise compliance requirements (and penalties for lack of compliance).

Any business holding stock of the above products is required to perform a complex two-stage stock- and sales-based calculation on every individual product type within each category of Excise goods. For example, orange juice under the category of sweetened drinks must be calculated separately from apple juice also under the category of sweetened drinks.

Further, such businesses are required to keep records audited by an external third party which show the quantity of Excise goods for the 12-month period prior to 1 December 2019. The results of the required calculations and audit could result in a liability to register for Excise Tax, even where there are no other ongoing Excise obligations.

For a detailed overview of the new Public Clarification, please refer to the attached Deloitte summary.

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