Navigating Excise Tax Administrative Exceptions in the UAE: A Guide for Businesses

The UAE’s Federal Tax Authority (FTA) offers businesses a crucial mechanism to seek relief from certain procedural requirements under the Excise Tax Law through the Excise Tax Administrative Exception process. This initiative is designed to assist businesses facing genuine challenges in complying with specific tax obligations, particularly in cases where obtaining standard export evidence is not feasible. By allowing alternative documentation in exceptional circumstances, the FTA ensures that legitimate transactions are not unfairly impacted. Understanding how to apply for an exception can be vital for businesses dealing with excise goods and cross-border trade.

What is an Excise Tax Administrative Exception?

An Excise Tax Administrative Exception enables businesses to request special concessions from specific procedural obligations under Federal Decree-Law No. 7 of 2017 on Excise Tax and its Executive Regulations. However, this exception is limited in scope and applies only when a business is unable to provide the standard official or commercial evidence required to confirm the export of excise goods from the UAE. It is important to note that this process does not grant exemptions from excise tax registration.

Who Can Apply for an Exception?

A business may apply for an Excise Tax Administrative Exception ifit meets the following criteria:

• It is registered with the FTA for excise tax.
• It faces genuine difficulty in meeting the procedural requirements.
• It can provide alternative supporting documentation to justify the request.

Acceptable Reasons for Requesting an Exception

The FTA may approve an exception request only if external circumstances prevent a business from obtaining the required official or commercial export evidence. These may include:

• Regulatory or logistical constraints that prevent access to official export documentation.
• Unforeseen business challenges that make it impossible to secure commercial export evidence.

In such situations, businesses must present alternative supporting evidence to validate their export claim. Exception requests are reviewed under Article 14(5) of the Executive Regulations.

How to Apply for an Exception

Businesses must submit their request for an Excise Tax Administrative Exception to the FTA via email at specialexceptions@tax.gov.ae. The request must include:

1. A completed Excise Tax Administrative Exception Request Form in an editable PDF format.
2. A detailed justification (maximum 500 words) explaining why the exception is needed.
3. Alternative supporting evidence such as contracts, invoices, bank payment receipts, or shipping documents.
4. Basic business details, including the Tax Registration Number (TRN).
5. Authorised signatory details, including their name, contact number, and email.
6. Information about any previous exception requests, along with the decision reference number (if applicable).

Who Can Submit the Request?

The request must be submitted by one of the following authorised individuals:

• The taxable person’s authorised signatory.
• The business’s registered Tax Agent.
• The business’s Legal Representative.

It is important to note that Tax Advisors who are not registered Tax Agents cannot submit an exception request on behalf of a business. If a Tax Agent is submitting the request, it must be sent from the email address registered with the FTA for their Tax Agent account.

Processing Timeline and FTA Response

The FTA reviews requests within 40 business days from the submission date. If additional information is required, another 40 business days may be needed for reassessment. The FTA will communicate its decision via email within 5 business days after finalizing the review.

Possible outcomes of the FTA’s decision:

• Approval – The business is allowed to use alternative evidence for export verification.
• Rejection – If the FTA finds the reason invalid or insufficient documentation was provided.
• Request for additional information – The business must submit the required details within the specified timeframe to avoid rejection.

All supporting documents must be in PDF, JPG, PNG, or JPEG format, with a maximum file size of 10 MB.

Key Takeaways

• Excise Tax Administrative Exceptions provide relief in cases where businesses cannot obtain the required export evidence.
• Requests must be submitted via email with comprehensive supporting documentation.
• The FTA’s review period is 40 business days, which may be extended if additional information is needed.
• Only registered Tax Agents, Legal Representatives, or Authorised Signatories can submit exception requests.

By following the proper procedure and ensuring compliance, businesses can effectively navigate the Excise Tax Administrative Exception process and minimize potential tax liabilities.