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Excise Tax - Understanding the Law and Circumstances of Tax Litigation in the UAE

Any country’s economic development and growth depend heavily on its tax system. The United Arab Emirates (UAE) has established itself as a centre for global commerce, drawing investors and businesspeople from throughout the world. Since a contemporary tax system was put in place, tax litigation and disputes have taken center stage in UAE law. The laws and regulations that apply to tax litigation in the UAE are discussed in this article along with an overview of the practice.

The legal procedure for resolving disagreements between taxpayers and tax authorities is referred to as tax litigation. The Federal Tax Authority (FTA), which is in charge of overseeing the application of the Value Added Tax (VAT) and Excise Tax systems, is the focal point of tax disputes in the United Arab Emirates. In the UAE, VAT was adopted in January 2018 and excise tax in October 2017. The FTA is in charge of carrying out audits, settling tax-related issues, and enforcing tax legislation.

The Law

A number of statutes govern tax litigation in the UAE, with the following standing out:

2017 Federal Tax Procedures Federal Law No. 7:
The legal basis for tax proceedings in the UAE is established by this statute. It defines the duties and responsibilities of both taxpayers and taxing authorities, as well as rules for assessments, audits, protests, appeals, and penalties.

Federal Law No. 7 of 2017 Executive Regulation, Cabinet Decision No. 36 of 2017:
This ruling offers additional information and rules for carrying out the tax processes statute. It covers a wide range of topics, including accounting records, audits, tax registration, returns, payments, and refunds.

Conditions for Tax Litigation: In order to file a tax lawsuit in the UAE, a number of requirements must be satisfied. The following are these circumstances:

  1. Before starting a lawsuit, taxpayers must exhaust all administrative remedies that are at their disposal. This entails submitting protests to the FTA and taking part in the tax procedures law’s dispute settlement mechanism.
  2. Time Limit: Taxpayers have a finite amount of time in which to submit a legal claim. A legal action must typically be started within 40 business days of obtaining the FTA’s decision on the objection.
  3. The Tax Disputes Resolution Committee (TDRC) is the appropriate court in the UAE to hear tax-related disputes. To provide an impartial and specialized venue for resolving tax disputes, the TDRC was founded.
  4. Legal Representation: Taxpayers are allowed to work with tax advisors or attorneys to help them during tax litigation processes. The skills required to negotiate the complexities of the UAE tax system are possessed by these individuals.


Given the adoption of the VAT and Excise Tax systems, Tax Litigation in the UAE is an important component of the legal landscape of the nation. For taxpayers to successfully traverse the procedure, it is crucial that they are aware of the pertinent rules and regulations. Individuals and organizations can settle tax issues and guarantee conformity with UAE tax laws by following the prescribed procedures and getting competent advice.

This article was published on  16 June 2023

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