The Legal Basis for Excise Tax Deregistration in the UAE
The UAE’s excise tax framework rests on Federal Decree-Law No. 7 of 2017, with its Executive Regulation set out in Cabinet Decision No. 37 of 2017. That regulation has been amended twice since: first by Cabinet Decision No. 108 of 2023, issued 6 November 2023 and effective from 1 December 2023, which rewrote the deregistration provisions in Articles 6 and 7 along with several other procedural areas; and again by Cabinet Decision No. 198 of 2025, issued 27 November 2025 and effective from 1 January 2026, which amended the tax registration provisions in Article 3. The deregistration rules a business needs to follow today still trace back to the 2023 amendment, even with the newer 2025 decision now in force elsewhere in the same regulation.
The 2023 amendment’s stated aim was to address practical challenges businesses faced under excise tax, sharpen the clarity of key concepts, and tighten procedures across several areas — the definition and tax base of excise goods, registration and deregistration, the handling of imports, production, and release of excise goods, warehouse keeper obligations, return filing and payment, refund conditions, and the penalty framework for non-compliance.
Who Must Register for Excise Tax
Excise tax registration becomes mandatory the moment a business engages in any of the following activities, with no revenue or transaction threshold applied before the obligation kicks in:
- Importing excise goods into the UAE
- Producing excise goods, where production results in the release of those goods for consumption within the UAE
- Stockpiling excise goods, holding them in the UAE under the specific circumstances the law defines as stockpiling
- Managing a warehouse or designated zone in the capacity of a warehouse keeper
Because no registration threshold exists for excise tax, any business engaged in these activities is required to register before beginning that activity, a meaningfully stricter starting point than VAT or Corporate Tax, both of which apply revenue thresholds before registration becomes mandatory.
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Excise Tax Deregistration — The Procedure Under Article 6
Article 6 of the Executive Regulation, as amended by Cabinet Decision No. 108 of 2023, sets out the deregistration process in detail.
Filing the Application
A registrant must apply for tax deregistration within 30 days of the date they stop being liable for tax obligations under Article 4 of the Decree-Law. This is a fixed window, not a target — missing it leaves the business technically still registered, with whatever ongoing compliance obligations that status carries.
When Cessation of Activity Triggers Deregistration
If a business stops conducting the excise-taxable activities described in Clause 2 of Article 2 of the Decree-Law, it is treated as no longer liable for tax obligations six months after stopping, unless the Authority is satisfied the business intends to resume those activities within the following six months. This six-month buffer gives a business that has paused operations, rather than permanently exited the excise goods market, room to resume without triggering an automatic deregistration.
Effective Date and Response Timeline
The Authority deregisters the business effective from the date it was no longer liable for tax obligations, not from the date the application happens to be filed or processed. Once an application is submitted, the Authority responds within 20 business days of receipt.
Authority-Initiated Deregistration
The Authority can deregister a business without a formal request in two specific situations: where the business is no longer liable for tax obligations under the regulation, or where continuing the registration would prejudice the integrity of the tax system, according to controls the Authority specifies. This gives the FTA a direct route to clean up registrations it has independently determined are no longer warranted, rather than waiting indefinitely for the business itself to file.
Notification Requirements
Whichever route triggers deregistration, the Authority must notify the business of the deregistration, or of initial approval of a deregistration request, within five business days of the relevant event.
Compliance Controls Before Deregistration Is Granted
Before deregistration is finalized, the business must satisfy three conditions: settle all tax due, settle all administrative penalties due, and submit all tax returns required under the Decree-Law and the Tax Procedures Law. None of these are waived simply because the business has stopped its excise-taxable activity — outstanding obligations follow the business until they are cleared.
Deregistration Does Not End Ongoing Compliance
Deregistration removes the business from the excise tax register, but it does not exempt the business from the Decree-Law or the Decision more broadly. If the conditions for tax registration are met again later, the business is expected to submit a new registration application rather than treating its earlier deregistration as a permanent exit from the system.
Rejection of a Deregistration Application Under Article 7
Article 7, also amended by Cabinet Decision No. 108 of 2023, sets the grounds on which the Authority can reject a deregistration application.
A rejection can follow where the business intends to resume excise-taxable activities within the next 12 months, where it fails to prove it is no longer liable for tax under Article 4, or where the duration of the business falls short of the six-month period referenced under Article 3 of the regulation. Where a rejection is issued, the Authority notifies the business within 20 business days, following the procedures the Tax Procedures Law sets out.
New Definitions Introduced Alongside the Deregistration Amendments
The same 2023 amendment that rewrote Articles 6 and 7 also added three new defined terms to the Excise Tax Regulation, aligning the framework with terminology already used in UAE VAT legislation:
- Official evidence — a document issued by a government authority, or an entity authorized by a government authority, proving the occurrence of an event or fact
- Commercial evidence — a document issued by a person other than a government authority or authorized entity, proving the occurrence of an event or fact
- Shipping certificate — a document issued by a shipping company or an entity it authorizes, proving the movement of goods from one place to another
These terms matter beyond their dictionary definitions: they determine how the place and time of supply of excise goods is established, and how the value of those goods is assessed for excise tax purposes — questions that come up directly during a deregistration review, where the Authority needs to confirm exactly when a business’s taxable activity actually stopped.
What’s Changed Most Recently — Cabinet Decision No. 198 of 2025
Businesses researching excise tax deregistration should be aware that the Executive Regulation has been amended again since the 2023 changes took effect. Cabinet Decision No. 198 of 2025, issued 27 November 2025 and effective from 1 January 2026, introduced further amendments to Article 3, governing applications for tax registration — adding a requirement for taxable persons to provide financial security as specified by the Authority, alongside any additional record-keeping or reporting requirements the Authority may issue.
The deregistration provisions in Articles 6 and 7 covered throughout this guide remain governed by the 2023 amendment and were not altered by the 2025 decision. Even so, the existence of a newer amendment to the same regulation is a useful reminder that excise tax procedures continue to evolve, and a business planning deregistration should confirm it is working from the current consolidated text of the regulation rather than an earlier version.
Practical Steps for Businesses Preparing to Deregister
- Confirm the exact date excise-taxable activity stopped, since this date anchors both the 30-day application window and the six-month cessation rule
- Settle outstanding tax and penalties before applying, since unresolved amounts will prevent the Authority from finalizing deregistration regardless of how the application itself is filed
- File all outstanding tax returns rather than assuming deregistration removes the obligation to bring filings up to date
- Be prepared to demonstrate no intention to resume activity within the relevant window, particularly where the business has paused rather than permanently exited excise-taxable operations
- Retain documentation supporting the cessation date, since this is precisely the kind of fact the Authority may ask to see official, commercial, or shipping evidence for during its review
Frequently Asked Questions (FAQs)
How long do I have to apply for excise tax deregistration in the UAE?
A business must apply for tax deregistration within 30 days of the date it stops being liable for tax obligations under Article 4 of the Excise Tax Decree-Law.
What happens if a business stops its excise-taxable activity but doesn’t apply for deregistration?
The business is deemed no longer liable for tax obligations six months after stopping the relevant activity, unless the Authority is satisfied it intends to resume that activity within the following six months. The Authority can also initiate deregistration itself in this situation, without waiting for the business to apply.
Can the FTA reject an excise tax deregistration application?
Yes. The Authority can reject an application if the business intends to resume excise-taxable activities within the next 12 months, fails to prove it is no longer liable for tax, or has not met the minimum duration condition referenced under the regulation. Rejections are communicated within 20 business days.
What must a business settle before excise tax deregistration is approved?
A business must settle all tax due, settle all administrative penalties due, and submit all outstanding tax returns before deregistration is finalized.
Can the FTA deregister a business without it applying?
Yes. The Authority can initiate deregistration without a formal request where it determines the business is no longer liable for tax, or where continuing the registration would prejudice the integrity of the tax system.
Is there a minimum revenue threshold before excise tax registration applies?
No. Excise tax has no registration threshold. Any business engaged in importing, producing, stockpiling, or warehousing excise goods must register before beginning that activity, regardless of transaction volume or revenue.
Does deregistering from excise tax mean a business never needs to register again?
No. Deregistration does not exempt a business from the Excise Tax Decree-Law generally. If the conditions for tax registration are met again in the future, the business is expected to submit a new registration application.
Need Expert Advice?
Contact the team at Farahat & Co. for professional support and expert insights for businesses operating in the UAE.
How Farahat & Co. Can Help
Excise tax deregistration involves strict timelines, compliance controls that must be cleared before an application can be approved, and grounds on which the Authority can reject a request outright. Farahat & Co. assists businesses across the UAE with excise tax registration, deregistration, and broader compliance with Federal Decree-Law No. 7 of 2017 and its current Executive Regulation.
Contact Farahat & Co. today to discuss your excise tax deregistration requirements.
