Tax Relief on Excise Goods

The Federal Tax Authority (“FTA”) has recently issued a Public Clarification (EXTP007) to set out the scenarios where relief from excise tax is in case of deficiency, quantity shortage, destruction within an excise tax designated zone.

We have provided below an overview of the ES Test and several strategies for mitigating the risk of non-fulfilment of the ES Test.

• General Rule
  • Released for consumption subject to excise tax:
    • Wastage
    • Deficient
    • Shortage of the expected quantity

• Exception
  • To apply for excise tax relief on wastage and destructed good, taxpayer must ensure to follow the following process:
    • FTA must be notified by the warehouse keeper within 30 days of discovering the deficiency or shortage via the Declaration Form available in the portal.
    • FTA dedicated email address: [email protected]
    • FTA will respond within 30 days from receipt of the notification

• FOR WASTAGE OF GOODS
  • it must be due to a legitimate cause
    • Force majeure;
    • Natural wastage and shortage;
    • In the course of production

• FOR GOODS TO BE DESTROYED
  • permission must be obtained from the FTA prior to destruction

• How can Crowe help?

• Support in securing excise tax relief from the FTA;

• Assist in preparing the required documentation for excise tax relief application.

• Assess client current practice if in line with the rules and procedures set in the Public Clarification