Issue
The FTA has implemented a Digital Tax Stamp ("DTS") regime which requires the marking of certain Designated Excise Goods with a physical and digital marker – also referred to as 'marks'. The purpose of the mark is to validate authenticity of Designated Excise Goods, as well as to track and trace the goods throughout the supply chain in order to verify whether tax has been paid on those goods.
Article 1(4) of Federal Tax Authority Decision No. 3 of 2018 on Implementing the Marking Tobacco and Tobacco Products Scheme indicates that for all types of cigarettes the date from which it is not permissible to supply any such products which do not have marks in the UAE shall be 1 August 2019.
The DTS scheme has been introduced with end-to-end traceability, also known as full aggregation. All marks on relevant products entering the UAE market were required to contain end-to-end traceability by 1 August 2019. An agreed workaround solution ("workaround") was also allowed as a short-term process to accommodate for the scenarios and entities where the end-to-end traceability was not yet ready to be in place, in the period until August 2019. Therefore, prior to 1 August 2019, Designated Excise Goods could enter the UAE market with a valid mark, which did not contain end-to-end traceability.
This public clarification provides further guidance on where DTS marked products have been imported into Designated Zones with customs control in the period until 1 August 2019 under the workaround solution and whether such products can be transferred to the UAE mainland or Duty Free areas after 1 August 2019.