This Public Clarification, effective 1 September 2022, explains how financial guarantees for Excise Tax Designated Zones are calculated. The FTA uses a risk-based approach that rewards good compliance with a lower guarantee. Step 1 sets the Guarantee Base from Excise Tax due on average month-end stock over twelve months. Step 2 sets a percentage from residence status, compliance history, financial status and years of operation, with specified percentages in some cases. Steps 3 and 4 give the preliminary and required guarantee amounts, with an upper limit of AED 25 million in certain cases.
EXTP008
Excise Tax Public Clarification
Excise Tax Designated Zones – Calculation of financial guarantees
Issue
All Warehouse Keepers (and persons intending to register as Warehouse Keepers) are required to provide a financial guarantee for each Designated Zone the Warehouse Keeper is responsible for. The amount of the required guarantee is determined by the Federal Tax Authority ("FTA").
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