Excise Tax Scenarios: Release from a Designated Zone

Summary

This guide provides comprehensive instructions for persons releasing excise goods from designated zones in the UAE, detailing the specific declaration requirements and procedures for various scenarios. The document outlines the obligations for releases into free circulation, transfers between designated zones, exports, and cases of deficiency or shortage.

It specifies when excise tax must be declared and paid, which forms must be submitted (EX201, EX202C, or EX203), and the timing requirements for submissions. The guide distinguishes between designated zones with and without customs department checks, requiring different declaration forms and submission timelines accordingly.

It clarifies that deductible excise tax forms must be submitted when goods are transferred to another designated zone or exported, allowing the originally paid tax to be deducted from the excise tax liability. The document also addresses deficient or shortage situations, where goods are considered released for consumption unless the Warehouse Keeper notifies the FTA within 30 days with satisfactory reasons.

Important notes clarify that freezone status does not automatically confer designated zone status, and that designated zones must be approved by the FTA with an appointed Warehouse Keeper.

Key points

Persons releasing excise goods from a designated zone with customs check into free circulation must submit Import declaration form EX201 at the point of release and pay excise tax at the point of filing the excise tax return
Persons releasing excise goods from a designated zone without customs check into free circulation (including consumption within the zone) must submit Tax Liability on Release from Designated Zone form EX202C at the end of every month and pay excise tax at the point of filing the return
Transfers to another designated zone require either EX201 or EX202C (depending on customs check status), declaration of excise tax due, submission of Deductible Excise Tax form EX203 stating the tax originally declared, and upload of evidence of tax paid, allowing the originally paid tax to be deducted from excise tax liability
Transfers of goods to the border for export follow the same procedure as transfers to designated zones: submit EX201 or EX202C, declare excise tax, submit EX203 form mentioning export, and upload evidence of tax paid for deduction
Registered persons who have paid excise tax on excise goods and export them outside the UAE must submit Deductible Excise Tax Form EX203 declaring the originally paid tax and upload evidence of payment, allowing deduction from excise tax liability
Goods found deficient or short in quantity in a designated zone are considered released for consumption and require submission of EX201 or EX202C (depending on customs check status)
Exception to deficiency treatment: if the Warehouse Keeper notifies the FTA of the deficiency/shortage within 30 days of discovery and the FTA is satisfied with the reason, it will not be treated as a release
All declarations are found within 'Excise Tax Returns and Declarations' on the E-Services portal
A Freezone is not automatically a designated zone; designated zone status must be approved by the FTA with an appointed Warehouse Keeper
Designated zones may include a fenced freezone or another approved area and can be identified by requesting its Designated Zone reference number

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You should use the table below if you are a person releasing excise goods from a designated zone in order to identify the declarations you will be required to file in certain scenarios.

If you are…..	…. and you…..	….then….	Declaration*
A person releasing goods from a designated zone where there is a check by the Customs department**	release excise goods into free circulation in the UAE	You must: 1. submit a declaration form at the point the goods are released from the designated zone; 2. pay the excise tax due at the point of filing your excise tax return	Import declaration EX201 found under “Excise Goods that require Customs Clearance”
A person releasing goods from a designated zone where there is not a check by the Customs department**	release excise goods into free circulation in the UAE (this includes consumption of excise goods within the designated zone)	You must: 1. submit a release from Designated Zone not requiring customs clearance form at the end of every month; 2. pay the excise tax due at the point of filing your excise tax return	Tax Liability on Release from Designated Zone not requiring Customs Clearance form EX202C found under “Excise Goods that do not require Customs Clearance”
A person releasing goods from a designated zone	transfer goods to another designated zone	You must: 1. EITHER submit a declaration form at the point of release of the goods if the designated zone is one where there is a check by the customs department OR submit a release from Designated Zone not requiring customs clearance form at the end of every month if the designated zone is one where there is not a check by the Customs department; 2. declare the excise tax due at the point of filing your excise tax return. 3. submit a Deductible Excise Tax form mentioning that the goods have entered a designated zone and stating the tax originally declared on the goods. 4. upload evidence the tax was paid (e.g. import declaration) as proof of any claim for deductible excise tax, as well as any evidence provided by Customs if applicable The tax originally paid will then be deducted from your excise tax liability on your excise tax return.	EITHER: Import declaration EX201 found under “Excise Goods that require Customs Clearance” OR Tax Liability on Release from Designated Zone not requiring Customs Clearance form EX202C found under “Excise Goods that do not require Customs Clearance” (depending on whether there is a customs check at the point of release from the designated zone) Deductible Excise Tax form EX203
A person releasing goods from a designated zone	transfer the goods to the border for export	You must: 1. EITHER submit a declaration form at the point of release of the goods if the designated zone is one where there is a check by the customs department OR submit a release from Designated Zone not requiring customs clearance form at the end of every month if the designated zone is one where there is not a check by the Customs department; 2. declare the excise tax due at the point of filing your excise tax return; 3. submit a Deductible Excise Tax form can then be submitted mentioning that the goods have been exported; 4. upload evidence the tax was paid (e.g. import declaration) as proof of any claim for deductible excise tax, as well as any evidence provided by Customs if applicable The tax originally paid will then be deducted from your excise tax liability on your excise tax return.	EITHER: Import declaration EX201 found under “Excise Goods that require Customs Clearance” OR Tax Liability on Release from Designated Zone not requiring Customs Clearance form EX202C found under “Excise Goods that do not require Customs Clearance” (depending on whether there is a customs check at the point of release from the designated zone) Deductible Excise Tax form EX203
A registered person who has paid excise tax on excise goods	export the goods outside the UAE	You must: 1. submit a Deductible Excise Tax Form declaring the tax originally paid on the goods (e.g. on import or production) 2. upload evidence the tax was paid (e.g. import declaration) as proof of any claim for deductible excise tax, as well as any evidence provided by Customs if applicable The tax originally paid will then be deducted from your excise tax liability on your excise tax return.	Deductible Excise Tax form EX203
A person releasing goods from a designated zone	own goods in the designated zone which are found to be deficient or there is a shortage in their quantity	the goods will be considered to be released for consumption and you must submit EITHER: 1. a declaration form at the point of release of the goods if the designated zone is one where there is a check by the customs department OR submit a release from Designated Zone not requiring customs clearance form at the end of every month if the designated zone is one where there is not a check by the Customs department; In the event the Warehouse Keeper notifies the FTA of the deficiency/shortage within 30 days of discovery and the FTA is satisfied with the reason for the deficiency, this will not be treated as a release. The FTA should be notified.	EITHER: Import declaration EX201 found under “Excise Goods that require Customs Clearance” OR Tax Liability on Release from Designated Zone not requiring Customs Clearance form EX202C found under “Excise Goods that do not require Customs Clearance” (depending on whether there is a customs check at the point of release from the designated zone) To report deficient goods to the FTA visit the Contact Us section of the FTA website.

*NOTE: Declarations are found within ‘Excise Tax Returns and Declarations’ on the E-Services portal.

**NOTE: A Freezone is not automatically a designated zone. A Designated Zone must be approved by the FTA and appointed with a Warehouse Keeper and may include a fenced freezone or another approved area. A Designated Zone can be identified by requesting its Designated Zone reference number.