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tax | Cabinet Resolution No. (23) of 2018 Concerning the Formation of Tax Disputes Resolution Committees, and its Relevant Regulations and Procedures | Article (18)
Without prejudice to the provisions of clause (1) of article (7) of this Resolution:
1. The Authority shall make electronic records, forms, and systems to connect
between the Authority, committees, relevant administration, and competent
courts in order to manage their competences stipulated in this Resolution and in
collaboration with the Ministry of Finance and the Ministry for this end.
2. The Minister shall issue regulatory resolutions on the mechanism of work subject
to these electronic records, forms, and systems, including the requirements,
controls, and procedures.
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tax | Cabinet Resolution No. (23) of 2018 Concerning the Formation of Tax Disputes Resolution Committees, and its Relevant Regulations and Procedures | Article (19)
Repeals
Any provision contrary to or inconsistent with the pr ovisions of this decision shall be
repealed.
Cabinet Resolution of 20 18 Forming the Tax Disputes Resolution Committees, Its Bylaws, and
Procedures to be Followed before it 12
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tax | Cabinet Resolution No. (23) of 2018 Concerning the Formation of Tax Disputes Resolution Committees, and its Relevant Regulations and Procedures | Article (20)
Publication and Enforcement
This Resolution shall come into force as of the date it is issued and shall be published
in the Official Gazette.
Mohammed bin Rashid Al Maktoum
Prime Minister
Issued by us:
Date: 15 Sha'ban 1 439 A.H.
Corresponding to: 1 May 2018 AD |
tax | Federal Law No. (11) of 1981 Imposing Federal customs duty on imports of tobacco | Article (1)
A federal customs duty shall be imposed on imports of tobacco and its products includ-
ing cigarettes, cigars, etc, whether manufactured or raw materials.
|
tax | Federal Law No. (11) of 1981 Imposing Federal customs duty on imports of tobacco | Article (2)
The tax rate shall be determined at (70%) Seventy Percent of the good’s price, calculat-
ed on the basis of its delivery at the port of arrival in the United Arab Emirates, in the
event it is imported from abroad.
A tax rate of (70%) Seventy Percent of the g ood’s manufacturing cost, in the event it was
manufactured, or its manufacturing was completed in the State, while taking into ac-
count any tax that may have been imposed on the materials included in its manufac-
turing.
The exports of such goods outside the State shall be exempted from the said tax.
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tax | Federal Law No. (11) of 1981 Imposing Federal customs duty on imports of tobacco | Article (3)
Without prejudice to the provisions of the second paragraph of article (2), the goods
stipulated in article (1) shall be temporarily exempted from tax if its import was for the
Federal Law No. (11) of 1981 Imposing Federal customs duty on imports of tobacco 2
purpose of re -exportin g thereof outside the State in their original condition.
It is conditional for such exemption that the importer pays to the competent authority a
cash deposit or provides a bank guarantee of the amount of the applicable tax and to
re-export the goods withi n one year from the date of such import. In the event of failure
to re -export such goods within one year, the tax shall become immediately payable.
Article (3) BIS
50% (Fifty percent) of the revenues from the above referenced Tax shall be paid to the
Min istry of Finance and Industry, and the remaining 50% (Fifty percent) shall be paid to
the local government within which the tax was collected at one of its ports on within
which the goods were manufactured. The Ministry of Finance and Industry shall ap-
poin t financial controllers at sea, air, and land ports in the State to monitor and imple-
ment the provisions of this Law.
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tax | Federal Law No. (11) of 1981 Imposing Federal customs duty on imports of tobacco | Article (4)
The Ministry of Finance and Industry shall, in cooperation with the local customs de-
partment in every emirate, collect the tax as provided by this Law.
|
tax | Federal Law No. (11) of 1981 Imposing Federal customs duty on imports of tobacco | Article (5)
The tax imposed hereunder shall be without prejudice to the local customs duties and
taxes levied or to be levied in the future, until the federal laws in connection with cus-
toms unity among th e emirates are issued.
Exemptions or tax discounts as set out in economical cooperation and double taxation
agreements shall not apply to the provisions of this Law.
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tax | Federal Law No. (11) of 1981 Imposing Federal customs duty on imports of tobacco | Article (6)
A person that may avoid or attempt to avoid the payment of the tax levied by this Law
shall be punished by imprisonment for no later than six months and/or a fine two times
the applicable tax, and in both events to confiscate the subject goods. If such goods
cannot be confiscated, such person shall pay the same value of such goods .
Federal Law No. (11) of 1981 Imposing Federal customs duty on imports of tobacco 3
Any other violation of the provisions of this Law or its executive bylaw shall be pun-
ished by a fine of AED 500 maximum.
All the above without prejudice to any severer penalty set out in any other law.
|
tax | Federal Law No. (11) of 1981 Imposing Federal customs duty on imports of tobacco | Article (7)
The executive bylaw of this Law shall b e issued under a resolution by the Minister of
Finance and Industry, in particular, such executive regulation shall indicate:
a. The Rules to be followed upon the calculation of the tax;
b. Such bodies allocated to collect the tax and the rules of such collection;
c. Any tax calculation, collection or other forms as required executing the provi-
sions of this Law and its executive regulation.
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tax | Federal Law No. (11) of 1981 Imposing Federal customs duty on imports of tobacco | Article (8)
This Law shall come in force from the date of issue hereof and shall be published in the
Official Gazette .
Khalifa Bin Zayed Al Nahyan
The President of the United Arab Emirates
Issued by us in the Presidential Palace in Abu Dhabi on
12 Shabaan 1401 Hijri,
corresponding to 14.6.1981
|
tax | Cabinet Resolution No. (38) of 2017 Concerning the Excise Goods, Excise Tax Rates and Method of Calculating Excise Price | Article (1)
Definitions
For the purpose s of applying the provisions of this Resolution, the following words and
expressions shall have the meanings assigned thereto respectively, unless the context requires
otherwise:
State : The United Arab Emirates.
Authority : The Federal Tax Authority.
Tax : The Excise Tax.
Decree -Law : Federal Decree -Law No. (7) of 2017 Concerning the Excise
Tax. Cabinet Resolution of 20 17 Concerning the Excise Goods, Excise Tax Rates, and Method of Calculating Excise Price 2
Excise Goods : Goods to be defined as taxable goods herein .
Taxable Person : Each person that is, or ought to be, registered for the tax
purposes pursuant to the provisions of the Decree -Law .
Importer : The natural or legal person that acts as the importer of
excise goods on the date of importation for the purposes
of customs clearance .
Excise Price : The price calculated in accordance wi th the provisions of
this Resolution .
Value Added Tax (VAT) : A tax levied on the importation and supply of goods and
services in accordance with Federal Decree -Law No. (8) of
2017 Concerning the Value -Added Tax (VAT) .
|
tax | Cabinet Resolution No. (38) of 2017 Concerning the Excise Goods, Excise Tax Rates and Method of Calculating Excise Price | Article (2)
Excise Goods
For the purposes of article (2) of the Decree -Law , the t ax shall be levied on the following excise
goods:
1. Tobacco and its products .
2. Soft drink s.
3. Energy drinks.
|
tax | Cabinet Resolution No. (38) of 2017 Concerning the Excise Goods, Excise Tax Rates and Method of Calculating Excise Price | Article (3)
Tobacco and Its Products
For the purposes of article (2) of this Resolution, tobacco and its products shall include all items
set forth in Chapter ( 24) of the Common Customs Tariff of the GCC States, which are imported,
cultivated or produced in the State.
Cabinet Resolution of 20 17 Concerning the Excise Goods, Excise Tax Rates, and Method of Calculating Excise Price 3
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tax | Cabinet Resolution No. (38) of 2017 Concerning the Excise Goods, Excise Tax Rates and Method of Calculating Excise Price | Article (4)
Soft Drink s
1. For the purposes of article (2) of this Resolution, soft drink s shall mean all of the following:
a. Any beverage that contains carbonated water, except for unflavored carbonated water.
b. Any concentrates, powder, gel, or extracts that can be converted into soft drinks .
2. For the purposes of this Article, soft drink s shall not include any beverage containing alcohol,
even if the product is considered a soft drink .
3. If the product referred to in Paragraph (b) of Clause (1) of this Article is previously taxed in the
State ; the soft drink produced from mixing such product with a gaseous agent at the place of
selling the product by a non -taxable person shall not be deemed as an excise good s for the
purposes of the Decree -Law and no tax shall be due there on. Further, the tax paid on the
product referred to in Paragraph (b) of Clause (1) of this Article may not be deemed as a
deductible tax in accordance with article (16) of the Decree -Law.
4. If any product is compatible with the definition of soft drink s set out in this Article and also
compatible with the definition of energy drink s set out in article (5) of this Resolution , such
product shall be classified a s an energy drink and shall be taxed at the rate applicable to
energy drinks.
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tax | Cabinet Resolution No. (38) of 2017 Concerning the Excise Goods, Excise Tax Rates and Method of Calculating Excise Price | Article (5)
Energy Drinks
1. For the purposes of article (2) of this Resolution, energy drinks shall mean all of the following:
a. Any beverages marketed or sold as energy drink s that may contain stimulant s or provide
mental and physical stimulation, includ ing but not limited to caffein e, taurine, ginseng
and guarana and any ingredients that h ave an identical or similar effect as the said
ingredients .
b. Any concentrates, powder, gel, or extracts that can be converted into energy drink s.
2. For the purposes of this Article, energy drinks shal l not include any beverage containing
alcohol, even if the product is considered an energy drink . Cabinet Resolution of 20 17 Concerning the Excise Goods, Excise Tax Rates, and Method of Calculating Excise Price 4
3. If the product referred to in Paragraph (b) of Clause (1) of this Article is previously taxed in the
State; the energy drink produced from mixing such product with any other products at the
place of selling the product by a non -taxable person shall not be deemed as an excise goods
for the purposes of the Decree -Law and no further tax shall be due thereon. Further, the tax
paid on the product referred to in Paragraph (b) of Clause (1) of this Article may not be
deemed as a deductible tax in accordance with A rticle (16) of the Decree -Law.
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tax | Cabinet Resolution No. (38) of 2017 Concerning the Excise Goods, Excise Tax Rates and Method of Calculating Excise Price | Article (6)
Tax Rate
For the purposes of article (3) of the Decree -Law, the t ax shall be levied on the excise goods
referred to in article (2) of this Resolution as per the following rate s:
Excise Goods Rate (%)
Tobacco and its products 100%
Soft Drinks 50%
Energy Drinks 100%
|
tax | Cabinet Resolution No. (38) of 2017 Concerning the Excise Goods, Excise Tax Rates and Method of Calculating Excise Price | Article (7)
Excise Price
1. In accordance with article (3) of the Decree -Law, the excise price shall be the higher of:
a. The price declared by the Authority for the excise good s in the price list issued thereby, if
any .
b. The designated retail price for such goods, less the tax included therein.
2. In order to deduct the value of the t ax included in the designated retail price , the following
calculations shall be used:
a. As to the e xcise goods taxable at a rate of (50%) of the excise price, the excise price shall
be equ al to two thirds of the designated retail price of such goods .
b. As to the excise goods taxable at a rate of (10 0%) of the excise price, the excise price shall
be equal to half of the designated retail price of such goods . Cabinet Resolution of 20 17 Concerning the Excise Goods, Excise Tax Rates, and Method of Calculating Excise Price 5
3. Notwithstanding the provision of Paragraph (b) of Clause (1) of this Article, the excise price
of soft drink s referred to in Paragraph (b) of Clause (1) of article (4) of this Resolution shall be
calculated in accordance with the mechanism determined by the Minister of Finance.
|
tax | Cabinet Resolution No. (38) of 2017 Concerning the Excise Goods, Excise Tax Rates and Method of Calculating Excise Price | Article (8)
Designated Retail Price
1. For the purposes of article (7) of this Resolution, the designated retail price shall be the higher
of:
a. The recommended retail price of the excise good s, which is specified, declared, and affixed
to the goods by the importer or producer. “The recommended retail price of the excise
goods ” shall mean the price achieved when the excise goods are sold for retail purposes
directly to the consumer, and it shall not include the cases of increasing the price due to
selling the excise goods in a hotel, restaurant, or similar facility for the purpose of
consumption in such facilities .
b. The average retail price of the goods in the market.
2. For the purposes of Paragraph (b) of Clause (1) of this Article, the taxable person shall
calculate the average retail price of the goods in the market as follows:
a. Identify ing the different retail prices of the excise goods in the market based on the
previous twelve months .
b. Deduct ing the value of the t ax included in the retail price in the market in accordance with
Clause (2) of article (7) of this Resolution or, if the retail price relates to a period preceding
the application of the tax, the full value of the retail price in the market shall be used .
c. Calculat ing the total excise goods sold at eac h retail price in the market in order to define
the total revenue s in the market for the period of twelve month s.
d. Divid ing the total revenues in the market by the total excise goods sold during the twelve -
month period .
e. Multiply ing the quotient as referred to in Paragraph (d) by the tax rate applicable to the
excise goods to arrive at the assumed tax due on the excise goods . Cabinet Resolution of 20 17 Concerning the Excise Goods, Excise Tax Rates, and Method of Calculating Excise Price 6
f. Add ing the resulting values as referred to in P aragraphs (d) and (e) together to arrive at
the average retail price of such goods in the market.
3. The taxable person shall re -calculate the average retail price of the goods in the market at least
once every six (6) month s. In the event that the calculation of the average retail price results
in adjust ing the designated retail price in accordance with Clause (1) of this Article, such
adjustment shall be made from the tax period following the calculation of the average retail
price , or the tax period following the date in which the calculation is supposed to be made,
whichever i s earlier .
4. If the taxable person is unable to identify the designated retail price referred to in Paragraphs
(a) and (b) of Clause (1) of this Article, such taxable person shall notify the Authority thereof
within no less than (15) days prior to the date of submitting the tax return.
5. In the event that the Authority ascertains that the taxable person is unable to identify the price
referred to in P aragraphs (a) and (b) of Clause (1) of this Article, it may permit the taxable
person to calc ulate the tax based on the cost of the excise goods .
6. The designated retail price shall include all the duties and taxes due on the excise goods ,
except for the value -added tax .
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tax | Cabinet Resolution No. (38) of 2017 Concerning the Excise Goods, Excise Tax Rates and Method of Calculating Excise Price | Article (9)
Repeal ing Conflicting Provisions
Any provision inconsistent or discrepant with the provisions of this Resolution is hereby repealed.
Cabinet Resolution of 20 17 Concerning the Excise Goods, Excise Tax Rates, and Method of Calculating Excise Price 7
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tax | Cabinet Resolution No. (38) of 2017 Concerning the Excise Goods, Excise Tax Rates and Method of Calculating Excise Price | Article (10)
Publi cation and Enforcement
This Resolution shall enter into force as of 1st October 2017 and shall be published in the Official
Gazette.
Mohammed bin Rashid Al Maktoum
Prime Minister
Issued by Us,
On: 4 Muharram 143 9 A.H.
Corresponding to: 24 September 2017 AD |
tax | Cabinet Resolution No. (37) of 2017 Concerning the Executive Regulations of Federal Decree-law No. (7) of 2017 on the Excise Tax | Article (1)
Definitions
Upon applying the provisions hereof , and unless otherwise required by the context, the following
words and expressions shall have the meanings assigned thereto:
State : The United Arab Emirates.
Minister : The Minister of Finance.
FTA : The Federal Tax Authority.
Decree -Law : Federal Decree -Law No. (7) of 2017 Concerning the Excise Tax.
Excisable Goods : The goods labeled as taxable goods under a Cabinet Resolution
based on the Minister’s proposal .
Import : Arrival of goods from abroad to the State territories .
Export : Departure of the goods from the State territories including the direct
and indirect export . Cabinet Resolution of 20 17 Concerning the Executive Regulations of Federal Decree -Law of 20 17 Concerning the
Excise Tax 2
Direct Export : Exporting excisable goods to a destination outside the State where
the supplier assumes the responsibility for making arrangements for
transport or appointment of a shipping agent to act on his behalf .
Indirect Export : Exporting excisable goods to a customer abroad who assumes the
responsibility for arranging receipt of goods from the supplier inside
the State and then exporting them himself or through appointing a
shipping agent to act on his behalf .
Customer
Abroad : The person who is not residing in the State, has no establishment
therein and is not registered for tax purposes in the State .
Person : Natural or juridical person.
Taxable Person : Every person reg istered or required to be registered for tax purposes
by virtue of the provisions of the Decree -law.
Specified Area : Any fenced area established to be a free zone and the access thereto
or exit therefrom is permitted through a specific way, and any area
set by FTA as supervised by a warehouse keeper under the
provisions of the Decree -law.
Warehouse
Keeper : Any person accepted and registered at FTA for supervising a specific
area under the provisions of the Decree -law.
Tax Registration : A procedur e by virtue of which the taxable person or his legal
representative gets registered at FTA for tax purposes .
Tax Registration
Number (TRN) : A number issued by FTA to every person registered for tax purposes .
Registered
Person : The table person holding a tax registration number .
Importer : The Importer whose name appears as importer of excisable goods
on the date of import for the customs clearance purposes .
Tax Return : The specific information and data provided by the taxable person,
for tax purposes, on the form set for this purpose by FTA . Cabinet Resolution of 20 17 Concerning the Executive Regulations of Federal Decree -Law of 20 17 Concerning the
Excise Tax 3
Businesses : Any activity regularly, continuously, and independently carried out
by any person in any place which includes, or may include, trade in
excisable goods .
Recoverable Tax : The amounts paid and may be refunded by FTA to the person under
the provisions of the Decree -law.
Tax Due : The tax assessed and applied under the provisions of the Decree -
law.
Tax Payable : The tax due which becomes payable to FTA .
Taxable Period : The time duration in respect of which the tax due shall be assessed
and paid .
Storing Person : The person owning excisable goods and cannot prove that they have
previously been subject to tax under the conditions stated herein .
Customs
Legislation : The federal and local legislations regulating customs in the State .
Applying
Countries : The GCC countries applying the Tax Law according to an issued
legislation .
Free Zone Retail
Store : Any retail store in a specific area selling goods to the passengers
departing from the State .
Part Two
Tax Compliance
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tax | Cabinet Resolution No. (37) of 2017 Concerning the Executive Regulations of Federal Decree-law No. (7) of 2017 on the Excise Tax | Article (2)
Taxable Persons
1. If the person who engages in the business according to item (1) of article (4) of the Decree -
law fails to satisfy the tax payment requirements, the person involved in any of the activities
set in item (2) of article (2) of the Decree -law shall be responsible for the tax due . This
includes without limitation:
a. The person falling within a supply chain for which the tax has not been paid . Cabinet Resolution of 20 17 Concerning the Executive Regulations of Federal Decree -Law of 20 17 Concerning the
Excise Tax 4
b. An investor or a person holding a financial interest in a supply chain for which the tax has
not been paid .
c. The owner of excisable goods in any case where he is the producer, importer, warehouse
keeper or storing person.
2. The warehouse keeper shall be responsible for payment of the tax due if the excisable goods
are released from a certain area and the person responsible for the tax payment fails to pay
the same in any of the following cases:
a. If the warehouse keeper fails to keep the records referred to in article (24) Decree -law.
b. If the warehouse keeper fails to meet any of the conditions imposed by FTA and
prescribed in item (6) of article (9) hereof.
c. If the warehouse keeper benefits in any way from the failure of the person responsible for
payment of the tax due .
3. The storing person shall not be responsible for payment of the tax due if the following
conditions are met:
a. If storing person owns excisable goods available for free trade for the business purpose in
the State provided that the tax has not been paid in respect of such goods, they have not
been exempted or have been returned or postponed.
b. The stored excisable goods shall not be surplus excisable goods under the provisions of
article (11) hereof.
Part Three
Registration
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tax | Cabinet Resolution No. (37) of 2017 Concerning the Executive Regulations of Federal Decree-law No. (7) of 2017 on the Excise Tax | Article (3)
Application for Tax Registration
1. For the purposes of tax registration, the taxable person shall meet the following conditions
and requirements:
a. To submit an application for tax registration including all the information and data
required by FTA through the methods set by FTA .
b. To provide a financial guarantee as set by FTA and Cabinet Resolution of 20 17 Concerning the Executive Regulations of Federal Decree -Law of 20 17 Concerning the
Excise Tax 5
c. To abide by any additional requirements in terms of keeping of records, reports or
resolutions set and issued by FTA .
2. FTA shall reply to the person applying for tax registration within (20) twenty business days
from the date of receipt of application.
3. The validity date of the tax registration shall be the first day of the month in which the person
starts the business referred to in item (2) of article (2) of the Decree -law.
4. FTA may modify the amount of financial guarantee provided by the taxable person.
5. Any person , required to submit a tax registration application under article (2) of the Decree -
law, may apply for registration as a warehouse keeper subject to the conditions set forth in
article (9) hereof.
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tax | Cabinet Resolution No. (37) of 2017 Concerning the Executive Regulations of Federal Decree-law No. (7) of 2017 on the Excise Tax | Article (4)
Exemption from Tax Registration
1. FTA may exempt the person from the tax registration if it has good reason to be believe that
such person will not import or export excisable goods from a specific area and then offer them
on regular basis for consumption.
2. For the purposes of item (1) of this Article , the expression “on regular basis” shall mean the
import or export of goods from a specific area more than one time no later than (6) six
months.
3. Notwithstanding the provisions of item (2) of this Article , if the person imports or exports
excisable goods from a specific area for four times within (24) twenty -four months, he shall
be treated as if he imports or exports such excisable goods from a specific area on regular
basis”.
4. The person exempted from tax registration under item (1) of this Article shall notify FTA,
within (20) twenty business days from the occurrence of any changes making him ta xable
under the Decree -law. The notice shall contain the information and data required by FTA and
shall be served in the way set by FTA for this purpose. Cabinet Resolution of 20 17 Concerning the Executive Regulations of Federal Decree -Law of 20 17 Concerning the
Excise Tax 6
5. If the person no longer satisfies the conditions of exemption from registration as set forth in
item (1) of this Article , FTA shall register him from the date on which he is no longer satisfies
such condit ions.
6. If the import tax is due under the provisions of article (6) of the Decree -law, the person shall
pay the tax due amount before or on the date of import of excisable goods in the way set by
FTA for this purpose.
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tax | Cabinet Resolution No. (37) of 2017 Concerning the Executive Regulations of Federal Decree-law No. (7) of 2017 on the Excise Tax | Article (5)
Rejection of Tax Registration Application
1. FTA may dismiss the tax registration application in the two following cases:
a. If it finds that the applicant does not intend to carry out any of the activities referred to in
item (2) of article (2) of the Decree -law.
b. If the applicant fails to provide the required information and data.
2. If FTA rejects the tax registration application, it shall notify the person of the dismissal decision
within (20) twenty business days from the date of receiving the application subject to the
procedures set forth in Federal Law No. (7) of 2017 referred to above.
3. If FTA rejects the tax registration application, the person may:
a. Apply for reconsideration of the decision subject to the procedures set forth in article (27)
of Federal Law No. (7) of 2017 referred to above.
b. Submit a further tax registration application under the provisions of article (3) hereof.
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tax | Cabinet Resolution No. (37) of 2017 Concerning the Executive Regulations of Federal Decree-law No. (7) of 2017 on the Excise Tax | Article (6)
Tax Deregistration
1. The registered person shall notify FTA of the cancellation of his tax registration within (30)
thirty days from the date the registered person becomes no longer responsible for tax
payment under the provisions of article (4) of the Decree -law.
2. FTA shall deregister the registered person from th e day on which the registered person
becomes no longer responsible for tax payment under the provisions of article (4) of the
Decree -law. Cabinet Resolution of 20 17 Concerning the Executive Regulations of Federal Decree -Law of 20 17 Concerning the
Excise Tax 7
3. FTA shall reply to the registered person’s deregistration application within (20) twenty
business days from the date o f receiving the application.
4. For the purposes of tax deregistration, the registered person shall comply with the following
conditions and requirements:
a. Payment of all the due taxes under the Decree -law.
b. Payment of all the due administrative penalties under the Decree -law and Federal Law
No. (7) of 2017 referred to above.
c. Submission of all due tax returns under the Decree -law and Federal Law No. (7) of 2017
referred to above.
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tax | Cabinet Resolution No. (37) of 2017 Concerning the Executive Regulations of Federal Decree-law No. (7) of 2017 on the Excise Tax | Article (7)
Rejection of Tax Deregistration Application
1. FTA may reject the tax deregistration application in the following cases:
a. If it finds that the person applying for tax deregistration intends to carry out any of the
activities referred to in item (2) of article (2) of the Decree -law within the next (12)
months.
b. If the person fails to prove to FTA that he is no longer responsible for tax payment under
the provisions of article (4) of the Decree -law.
c. If a period of less than (6) months lapses from the date of tax registration of the person
under the provisions of A rticle (3) hereof.
2. If FTA rejects the tax deregistration application, it shall notify the person of the dismissal
decision within (20) twenty business days from the date of receiving the application subject
to the procedures set forth in Federal Law No. (7 ) of 2017 referred to above.
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tax | Cabinet Resolution No. (37) of 2017 Concerning the Executive Regulations of Federal Decree-law No. (7) of 2017 on the Excise Tax | Article (8)
Tax Registration on Commencement of Tax Application
1. The tax registration shall commence from the date set by FTA . Cabinet Resolution of 20 17 Concerning the Executive Regulations of Federal Decree -Law of 20 17 Concerning the
Excise Tax 8
2. If FTA has good reason to believe that the taxable person failed to notify FTA of his
commitment to tax registration under the provisions of item (1) of this Article, FTA may
register him from the effective date of the Decree -law.
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tax | Cabinet Resolution No. (37) of 2017 Concerning the Executive Regulations of Federal Decree-law No. (7) of 2017 on the Excise Tax | Article (9)
Registration as Warehouse Keeper
1. Any person , who operates or intends to operate a specific area , shall apply for registration as
a warehouse keeper.
2. The application for registration as a warehouse keeper shall contain the information and data
required by FTA and shall be served in the way set by FTA .
3. The effective date of registration as a warehouse keeper shall be from the date of FTA approval
of the application or any date requested by the person and accepted by FTA .
4. FTA shall issue a certificate of registration as warehouse keeper covering all the specific areas
for which he is responsible and where the production or storage of excisable goods without
clearance is permitted for consumption.
5. For the purposes of registrati on as warehouse keeper, FTA may apply the following
conditions :
a. To set the quantity of excisable goods which the warehouse keeper is allowed to store at
any time in every specific area for which he is responsible.
b. To set the type of excisable goods which t he warehouse keeper is allowed to keep in every
specific area for which he is responsible.
c. To require the warehouse keeper to provide financial guarantee in respect of every
specific area for which he is responsible as set by FTA .
d. To impose additional requ irements in terms of keeping records and reports and
submission thereof to FTA .
e. To set the level of physical security level required in every specific area for which he is
responsible.
f. To set the examinations the warehouse keeper is required to carry out in respect of the
excisable goods stored in every specific area for which he is responsible. Cabinet Resolution of 20 17 Concerning the Executive Regulations of Federal Decree -Law of 20 17 Concerning the
Excise Tax 9
g. To set the condition of access to and exit from every specific area for which he is
responsible as well as any other access or exit restrictions the warehouse keeper shall
impose.
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tax | Cabinet Resolution No. (37) of 2017 Concerning the Executive Regulations of Federal Decree-law No. (7) of 2017 on the Excise Tax | Article (10)
Change of Warehouse Keeper Status
1. The warehouse keeper shall notify FTA of any changes he may experience, and which would
affect his registration as warehouse keeper , including the cases where the warehouse keeper
is no longer operating a specific area, in the ways set by FTA and within (30) thirty days from
the date of any of the following:
a. The date of expiry of the warehouse keeper’s responsibility for supervision an d
management of the specific area he is appointed as keeper.
b. The date of enforcement of the changes affecting the warehouse keeper’s condition.
2. FTA shall deregister the warehouse keeper from the date of the relevant occurrence.
3. FTA shall reply to the notic e served by the warehouse keeper within (20) twenty business
days from the date of receipt of the notice.
4. If the warehouse keeper applies for deregistration, FTA shall cancel his responsibility for the
specific area and shall not deregister him till the completion of all his duties and
responsibilities in respect of the period during which he was registered subject to the
conditions and requirements set by FTA .
5. Without prejudice to the provision of item (4) of this Article , if it is needed to continue the
operation of the specific area, the warehouse keeper applying for deregistration shall submit
a copy of the new warehouse keeper’s registration application unde r the provisions of Article
(9) hereof in addition to any other documents determined by FTA .
Cabinet Resolution of 20 17 Concerning the Executive Regulations of Federal Decree -Law of 20 17 Concerning the
Excise Tax 10
Part Four
Tax Payment Rules
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tax | Cabinet Resolution No. (37) of 2017 Concerning the Executive Regulations of Federal Decree-law No. (7) of 2017 on the Excise Tax | Article (11)
Storage
1. A person shall be treated as a storing person if he owns “excess excisable goods” in free trade
and which are available in the course of practice of businesses in the State and for which no
tax was paid in the past, it was exempted, returned or postponed.
2. “Excess excisable goods” shall mean the excisable goods to which all the following
requirements appl y:
a. They are owned by the storing person on the date on which the tax obligation arises, the
date on which the tax obligation increases or the date of commencement of effectiveness
of the Decree -law, whichever is earlier.
b. They shall be in excess of the monthly storage average of the storing person of such type
of excisable goods, whether purchases or produced, as determined based on the (12)
months period preceding the date set in paragraph (a) of this item.
c. The storing person shall own them prior to the date set in paragraph (a) of this item.
d. The storing person shall intend their sale in the course of practice of businesses in the
State.
3. As an exception from the provisions of paragraph (b) of item (2) of this Article , if the monthly
sale average of the excisable goods is assessed based on the (12) months period preceding
the date set in paragraph (a) of item (2) of this Article, and it is found that the storing person
has excisable goods since more than two months based on such averag e, regardless of the
monthly stock of such person, any goods in excess of two months shall be treated as excess
excisable goods and shall be taxable.
4. In the course of practice of his businesses in the State, any person shall keep audited records
indicating the quantity of his stock of excisable goods from the date of enforcement of the
Decree -law for the purposes of ensuring the excisable goods stock.
Cabinet Resolution of 20 17 Concerning the Executive Regulations of Federal Decree -Law of 20 17 Concerning the
Excise Tax 11
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tax | Cabinet Resolution No. (37) of 2017 Concerning the Executive Regulations of Federal Decree-law No. (7) of 2017 on the Excise Tax | Article (12)
Offering Goods for Consumption
1. Excisable goods shall be offered for consumption in any of the following cases:
a. Production of the excisable goods
b. Getting the excisable goods out of a particular area and offering them for free trade.
2. For the purposes of paragraph (a) of item (1) of this Article , the excisable goods shal l be
treated as produced on the same date such goods arrive in any of the following conditions:
a. To be ready for retail sale
b. To be ready for consumption or sale if they are not intended for retail sale .
c. To be ready for sale to retailer if the excisable goods are of a type unintended for
consumption until they are added to another product at the retail sale point.
3. For the purposes of paragraph (b) of item (1) of this Article , the excisable goods shall be
treated as leaving the specific area and offered for free trade in any of the following cases:
a. If the excisable goods leave the specific area unless they are transported to another
specific area without launch for consumption or for export under the conditions referred
to in the Decree -law and th is Resolution.
b. If they are consumed or purchased for consumption inside the specific area.
c. If there is irregularity during the transport of the excisable goods from the specific area to
another area and this results in the offering of excisable goods for c onsumption.
d. If there is a damage or shortage in their quantity from a specific area or during their
transport from the specific area to another area or during their keeping in suspended
position under the customs legislations.
4. The word “irregularity” refer red to in paragraph (c) of item (3) of this Article shall mean any
circumstance occurring during the transport of the excisable goods from the specific area to
another area and such goods have not been transported according to the conditions set in
herein or in case the excisable goods are damaged or lost.
5. As an exception from the provision of paragraph (d) of item (3) of this Article , the excisable
goods shall not be treated as offered for consumption in the following cases: Cabinet Resolution of 20 17 Concerning the Executive Regulations of Federal Decree -Law of 20 17 Concerning the
Excise Tax 12
a. If the warehouse keeper respons ible for the excisable goods notifies FTA within (30) thirty
days from discovering any damage in the excisable goods or shortage in their quantity.
b. If it is found that the damage of the excisable goods or shortage of their quantity as a result
of a reasonable reason admitted by FTA .
6. The damaged goods may be destroyed after the lapse of (30) thirty days from notifying FTA if
FTA approves the destruction.
7. For the purposes of item (6) of this Article, the goods may be destroyed after the lapse of (30)
thirty days from notifying FTA unless FTA instructs to keep the goods in their condition for
inspection.
8. If FTA notifies the warehouse keeper within the period set in items (6) and (7) of its wish to
inspect the goods, the warehouse keeper shall keep the ex cisable goods until FTA completes
the inspection and issues its approval for the destruction.
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tax | Cabinet Resolution No. (37) of 2017 Concerning the Executive Regulations of Federal Decree-law No. (7) of 2017 on the Excise Tax | Article (13)
Announced Price Include s Tax
1. The announced prices of excisable goods shall be inclusive of the tax if an agreement for
purchase of the goods is concluded and the goods have not been supplied before the date the
Decree -law comes into force, in the following cases:
a. If the buyer of the excisable goods intends to merge them to be come a component in
another taxable excisable good.
b. If the buyer of the excisable goods intends to export them to a place outside the State.
c. If the buyer is a foreign government, international organization or a diplomatic missio n
that is entitled to get back the paid tax under the provisions of item (1) of article (21) of
the Decree -law.
d. If the excisable goods are sold after the date the Decree -law comes into force to a person
who will export the excisable goods to an applying st ate and who will be taxable in such
state and is entitled to get back tax under the provisions of item (2) of article (21) of the
Decree -law.
e. If the buyer intends to resell the excisable goods. Cabinet Resolution of 20 17 Concerning the Executive Regulations of Federal Decree -Law of 20 17 Concerning the
Excise Tax 13
2. The tax shall be become due in the cases referred to in item ( 1) of this Article in addition to
the price announced by the supplier.
Part Five
Exempted Excisable Goods
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tax | Cabinet Resolution No. (37) of 2017 Concerning the Executive Regulations of Federal Decree-law No. (7) of 2017 on the Excise Tax | Article (14)
Exemption of Exported Goods
1. The excisable goods exported shall be exempted from tax if they are not offered for
consumption in the State and they have not been subject to tax previously in any of the
following cases:
a. If they are exported outside the State and provided that they are transported to the export
place under a suspended position according to the customs legislations and the
conditions and requirements set forth in item (11) of article (15) hereof.
b. If the export is for the consumption within an international flight depa rting from the State
which shall be transported to the export place under a suspended position according to
the customs legislations.
c. If they are purchased from a retail store in the duty free by a person who will export the
excisable goods directly provided that he provides a proof that they depart the applying
countries at the sale point.
2. The direct export shall be exempted from tax in case all the following conditions are me t:
a. The goods are actually exported by the importer to a place outside the State.
b. The exporter keeps an official and commercial proof of the export.
c. The goods are not used, whether in part or otherwise, and no changes are made thereto
in the period between the export and import unless to the extent necessary for
preparation of such goods for export.
3. The indirect export shall be exempted from tax in case all the following conditions are met:
a. The customer abroad exports the actually supplied goods to a place o utside the State.
b. The customer abroad gets an official and commercial proof of the export process and
submission of a copy thereof to the supplier. Cabinet Resolution of 20 17 Concerning the Executive Regulations of Federal Decree -Law of 20 17 Concerning the
Excise Tax 14
c. The goods are not used, whether in part or otherwise, and no changes are made thereto
in the period between the export and import unless to the extent necessary for
preparation of such goods for export.
4. For the purposes of items (2) and (3) and subject to the item (5) of this Article,
a. “Official proof” shall mean the export documents issued by the local customs d epartment
in the Emirate.
b. Commercial proof shall include:
1. Airway bill
2. Bill of lading
3. Shipping Document
4. Shipping Certificate
5. For the purposes of item (4) of this Article , FTA may set alternate forms in lieu of the evidence
proofs depending on the nature of the export or the nature of exported goods.
Part Six
Specific Areas
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tax | Cabinet Resolution No. (37) of 2017 Concerning the Executive Regulations of Federal Decree-law No. (7) of 2017 on the Excise Tax | Article (15)
Specific Areas
1. The stored, kept or treated excisable goods in the specific area or those transported between
a specific area, and another shall be treated as not offered for consumption under article (12)
hereof .
2. For the purposes of article (13) of the Decree -law, the “specific area” is one of the following:
a. A free zone which shall meet the following conditions:
1. Availability of security controls for the restriction of access and exit of persons and
transport of goods from and to such specific area.
2. The s pecific area shall be subject to control and supervision by a customs department.
3. A warehouse keeper shall be appointed for the specific area.
b. Any area set by FTA if it meets the following conditions:
1. To be a geographically determined area Cabinet Resolution of 20 17 Concerning the Executive Regulations of Federal Decree -Law of 20 17 Concerning the
Excise Tax 15
2. To security cont rols for the restriction of access and exit of persons and transport of
goods from and to such specific area subject to the regulations set by FTA .
3. A warehouse keeper shall be appointed for such area .
3. The specific area shall be registered through an applic ation to be submitted by the warehouse
keeper to FTA subject to the procedures FTA sets.
4. FTA may request the provision of a financial guarantee in respect of the registration of every
specific area as it sets.
5. Every person appointed as warehouse keeper shall control the specific area and supervise the
same and the transport of goods without their launch for consumption to another specific
area subject to the following conditions:
a. To keep the records of excisable goods available in the specific area at an y time subject to
item (8) of this Article.
b. To keep a proof on the excisable goods transported to another specific area without their
launch for consumption under item (8) of this Article.
c. Any other records as required by FTA in relation to a specific area the warehouse keeper
supervises.
6. The records referred to in paragraph (a) of item (5) of this Article may be kept by other
persons, but they remain the warehouse keeper’s responsibility.
7. The excisable goods imported to, received in or produced in a specif ic area or stored, kept,
treated or otherwise in any form in a specific area will not be taxable unless they are cleared
from the specific area or treated as offered for consumption under article (12) hereof.
8. The warehouse keeper shall keep the supporting documents required by FTA in relation to
the keeping of excisable goods in the specific area and the ways of treatment of such goods
and shall submit such documents upon request. Such kept documents shall be sufficient to
ensure the following:
a. The stock le vels at the specific area at any time .
b. The value and quantity of excisable goods entering to the specific area .
c. The value and quantity of excisable goods exiting from the specific area and offered for
consumption . Cabinet Resolution of 20 17 Concerning the Executive Regulations of Federal Decree -Law of 20 17 Concerning the
Excise Tax 16
d. The value and quantity of excisable goods transported to another specific area including
the details of such specific area .
e. The value and quantity of exci sable goods transported from the specific area for export
purposes .
f. The value and quantity of excisable goods produced within the specific area .
9. The transport of excisable goods from a specific area to another specific area inside the State
shall not be subject to tax in the following cases:
a. If the excisable goods or any part thereof are not offered for consumption during
transport .
b. If the excisable goods are not used or any change is made thereto in any way during their
transport .
c. If the transport takes place in accordance with the rules and regulations set by FTA .
10. For the purposes of article (14) of the Decree -law, the excisable goods are transported
between specific areas in the State subject to the following procedures:
a. The warehouse keeper in charge o f the specific area to which excisable goods are
transported shall issue a document with the following details:
1. The type of excisable goods to be transported .
2. The quantity and type of excisable goods to be transported .
3. The value of tax due in case the exci sable goods are offered for consumption in the
course of their transport to another specific area.
b. The warehouse keeper in charge of the specific area in which excisable goods are
delivered shall ensure that the excisable goods are received.
c. The excisable goods shall be accompanied by the document issued according to
paragraph (a) of this item during the transport of goods.
d. The document issued according to paragraph (a) of this item in relation to the transport
shall be provided to FTA upon request.
11. For the purposes of Articles (12) and (14) of this Decree -law, the excisable goods may be
transported between the specific areas inside the State or from a specific area for export
purposes if the following conditions are met: Cabinet Resolution of 20 17 Concerning the Executive Regulations of Federal Decree -Law of 20 17 Concerning the
Excise Tax 17
a. The warehouse keeper of the specific area from which excisable goods are transported
shall remain responsible until they are received by the warehouse keeper of the specific
area to which are transported or until they are exported.
b. The person in charge of transport of the excisable goods shall be taxable or a warehouse
keeper in any of the two areas.
c. In case of transport of excisable goods by a taxable person, prior approval shall be
obtained for transport of such excisable goods from the warehouse keepers and the
warehouse keeper may refuse the request of the taxable person for transport of such
goods.
d. The warehouse keeper shall keep a copy of all the approval s issued for the transport of
excisable goods by the taxable person.
Part Seven
Calculation of Tax Due
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tax | Cabinet Resolution No. (37) of 2017 Concerning the Executive Regulations of Federal Decree-law No. (7) of 2017 on the Excise Tax | Article (16)
Deductible Tax
1. A taxable person who is entitled to deduct tax under article (16) of the Decree -law may
deduct the tax in his tax return in respect of the period during which the deduction right arises.
2. For the purposes of item (1) of this Article , the deductible tax amount equals the tax
previously paid in respect of the same goods.
3. For the purposes of evaluating the deductible tax under item (2) of this Article , the taxable
person may, if so, requested by FTA , submit proofs on the tax value previously paid in respect
of the same excisable goods. FTA shall set the way of submission of such proofs to ensure that
the taxable person has paid the tax.
4. For the purposes of item (3) of this Article , if the tax is paid in respect of the excisable goods
by another party within the supply chain, the taxable person shall keep the tax payment proof
as follows:
a. A copy of the excisable goods purchase voucher
b. Acknowledgment by the supplier confirming the payment of tax and val ue thereof. Cabinet Resolution of 20 17 Concerning the Executive Regulations of Federal Decree -Law of 20 17 Concerning the
Excise Tax 18
c. The information proving, in the way acceptable to FTA , that the excisable goods subject
of the claim are the same excisable goods in respect of which the tax was paid .
5. If the tax in respect of excisable goods becomes due in the State, the taxab le person may claim
tax refund under paragraph (a) of item (1) of article (16) of the Decree -law in the following
cases:
a. If the goods are exported to a country outside the applying countries.
b. If the goods are exported to an applying country and the tax was paid in respect of the
same goods.
c. If the goods are consumed in an international flight departing from the State.
6. Any tax deduction shall be on the basis of meeting the above conditions and the requirements
set by FTA .
Part Eight
Tax Returns, Tax Periods and Tax Payment
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tax | Cabinet Resolution No. (37) of 2017 Concerning the Executive Regulations of Federal Decree-law No. (7) of 2017 on the Excise Tax | Article (17)
Tax Period Duration
1. The tax period duration shall be one calendar month.
2. FTA may decide that the first tax period of the taxable person after registration is longer than
the tax period duration set in item (1) of this Article .
3. As an exception from the provisions of item (1) of this Article , FTA may instruct the taxable
person to p rovide tax returns in respect of longer tax periods or approve his application for
such action.
4. The application referred to in item (3) of this Article shall be submitted to FTA in the way and
form set by FTA .
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tax | Cabinet Resolution No. (37) of 2017 Concerning the Executive Regulations of Federal Decree-law No. (7) of 2017 on the Excise Tax | Article (18)
Tax Return
1. The taxable person shall submit a tax return in the way and form set by FTA . Cabinet Resolution of 20 17 Concerning the Executive Regulations of Federal Decree -Law of 20 17 Concerning the
Excise Tax 19
2. The taxable person shall submit the tax return to FTA according to item (1) of this Article latest
by the 15th (fifteenth) day of the month following the respective tax period.
|
tax | Cabinet Resolution No. (37) of 2017 Concerning the Executive Regulations of Federal Decree-law No. (7) of 2017 on the Excise Tax | Article (19)
Tax Payment
1. The tax payable shall be settled through the ways set by FTA .
2. The taxable person shall settle the tax payable in respect of any month to FTA latest by the
15th (fifteenth) day of the next month.
3. The customs departments shall :
a. Verify the quantity of excisable goods imported to the State against the import
acknowledgment submitted by the importer before clearance of the excisable goods. If
the person is not taxable, the payment of any tax due and charges shall be verified.
b. Verify the quantity of excisable goods exported from the State against the export
document.
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tax | Cabinet Resolution No. (37) of 2017 Concerning the Executive Regulations of Federal Decree-law No. (7) of 2017 on the Excise Tax | Article (20)
Submission of Periodic Tax Returns
1. The taxable person shall submit tax returns in the way and form set by FTA in respect of the
following:
a. Details of the excisable goods to be imported .
b. Details of the excisable goods produced in the State .
c. Details of the excisable goods transported from a specific area.
2. FTA shall set the dates for submission of tax returns referred to in item (1) of this Article .
Cabinet Resolution of 20 17 Concerning the Executive Regulations of Federal Decree -Law of 20 17 Concerning the
Excise Tax 20
Part Nine
Refund of Excess Tax
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tax | Cabinet Resolution No. (37) of 2017 Concerning the Executive Regulations of Federal Decree-law No. (7) of 2017 on the Excise Tax | Article (21)
Refundable Excess Tax
1. The excess tax refund application which the taxable person may claim shall contain the
information and data set by FTA and shall be submitted through the ways set by FTA within
(5) five years from the date the person’s right to file the refund application arises.
2. Subject to FTA powers and its obligations specified in the Decree -law and this Resolution, FTA
shall refund the excess tax to the taxable person if it verifies h is entitlement to the refund.
3. Subject to item (6) of this Article , if FTA is required to refund the excess tax under item (2) of
this Article , this shall be carried out within the later of:
a. Two months from the submission of the refund application or
b. (21) twenty -one days from FTA review of the refund application if it so decides.
4. FTA shall not be required to refund any excess tax to the taxable person in case of expiry of a
period less than two tax periods from the end of the tax period during which the excess tax
results.
5. FTA may, at its sole discretion, refund the excess tax before the expiry of the period of two tax
periods in any of the following cases:
a. If the taxable person cancels his tax registration or
b. If FTA finds that the taxabl e person will be engaged in taxable businesses in the future and
that he is expected to have refundable excess tax for a period of not less than one year.
6. If the taxable person delays the submission of the tax return in respect of any tax period under
the provisions of the Decree -law, FTA may suspend the refund of any refundable amounts
until he submits any delayed returns.
Cabinet Resolution of 20 17 Concerning the Executive Regulations of Federal Decree -Law of 20 17 Concerning the
Excise Tax 21
Part Ten
Other Refund Cases
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tax | Cabinet Resolution No. (37) of 2017 Concerning the Executive Regulations of Federal Decree-law No. (7) of 2017 on the Excise Tax | Article (22)
Refund Applications in Special Cases
1. If any tax is paid by a foreign government, international organization or diplomatic mission,
the said tax refund application may be filed subject to the following conditions:
a. The excisable goods shall be obtained for official use exclusively.
b. If the country where the foreign government, international organization or diplomatic
mission is established and has official seat therein exempts the similar organizations of
the State from the burdens of any excise tax applicable in such country.
c. The ref und shall be in line with the conditions of any international convention or other
agreement on the tax obligations of such foreign government, international organization,
or diplomatic mission.
d. The excisable goods shall not have been obtained for the purpo se of resale or any other
commercial purposes.
2. If a registered person in an applying country pays the tax in the State, then he exports the
excisable goods to another applying country and pays the tax in the other applying country,
he may apply for tax ref und subject to the following conditions:
a. He shall not be registered in the State.
b. To submit the evidence supporting his application and proving that the person is taxable
in another applying country.
c. To submit the evidence confirming the payment of tax in respect of the excisable goods
in the State including the value of paid tax.
d. To submit the evidence confirming the export of excisable goods to another applying
country.
e. To submit the evidence confirming the payment of tax in respect of the excisable goods
in another applying country.
3. Subject to article (21) of the Decree -law, the tax refund application shall be submitted as
follows: Cabinet Resolution of 20 17 Concerning the Executive Regulations of Federal Decree -Law of 20 17 Concerning the
Excise Tax 22
a. Submission of the information and data requested by FTA and through the ways it sets.
b. If the application covers a period of n ot less than one month.
c. If the application covers a tax paid in respect of goods, the value of which is not less than
the amount set in a resolution from the Minister.
d. If the application is accompanied by the documents set by FTA .
Part Eleven
Keeping the Tax Records
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tax | Cabinet Resolution No. (37) of 2017 Concerning the Executive Regulations of Federal Decree-law No. (7) of 2017 on the Excise Tax | Article (23)
Requirements of Keeping Tax Records
1. The taxable person shall keep the price lists of produced, imported, or sold excisable goods
and shall prov ide FTA with such records upon request.
2. For the purposes of item (1) of this Article , the price lists shall be sufficient to identify the
produced, imported or sold excisable goods and shall cover the details of values of such
excisable goods.
3. The required tax records shall be kept for the time periods and subject to the conditions and
regulations set forth in the Executive Regulations of the Federal Decree -law No. (7) of 2017,
referred to above.
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tax | Cabinet Resolution No. (37) of 2017 Concerning the Executive Regulations of Federal Decree-law No. (7) of 2017 on the Excise Tax | Article (24)
Repeal of Conflicting Provisions
Every provision contradicting or conflicting with the provisions hereof shall be repealed.
Cabinet Resolution of 20 17 Concerning the Executive Regulations of Federal Decree -Law of 20 17 Concerning the
Excise Tax 23
|
tax | Cabinet Resolution No. (37) of 2017 Concerning the Executive Regulations of Federal Decree-law No. (7) of 2017 on the Excise Tax | Article (25)
Publi catio n and Enforcement
This Resolution shall enter into force from 01/10/2017 and shall be published in the Official
Gazette.
Mohammed bin Rashid Al Maktoum
Prime Minister
Issued by us:
On: 4 Muharram 1439 AH
Corresponding to : 24 September 2017 AD |
finance and banking | Federal Decree-Law No. (48) of 2023 Regulating Insurance Activities | Article (1)
Definitions
For the purpose of applying the provisions of this Decree -Law, the following words and
expressions shall bear the meanings assigned thereto respectively, unless the context requires
otherwise:
The State
: The United Arab Emirates.
Federa l Decree Law of 2023 Regulating Insurance Activities 2
The CBUAE
: The Central Bank of UAE.
Board
: The CBUAE's Board of Directors.
Chairman
: The Chairman of the Board.
Governor
: The CBUAE's Governor.
Free Zone
: Any financial free zone established in the State under the provisions of
Federal Law No. (8) of 2004, on Financial Free Zones, or any other
superseding law.
Insurance
Company
(Insurer)
: An insurance company incorporated in the State and a foreign insurance
company licens ed to engage in insurance business in the State, either
through a branch or through an Insurance Agent.
Reinsurance
Company
: A reinsurance company licensed to engage in reinsurance business, either in
the State or abroad.
Companies
: Insurance and reinsurance companies.
The Insured
: A Person that enters into an insurance policy with the Insurance Company
for their benefit or the benefit of the named Insured or the Beneficiary.
Beneficiary
: A Person who initially acquires the Insurance Policy rights or to whom such
rights are legally transferred.
Federa l Decree Law of 2023 Regulating Insurance Activities 3
Insurance
Policy
: A contract between the Insurer and the Insured setting out the insurance
terms, rights and obligations of both parties or the rights of the insurance
Beneficiary, and the annexes attached to the policy constitute an integral
part thereof.
Insurance
Agent
: A Person licensed or authorized the CBUAE, and is approved by the
Insurance Company and authorized to carry out insurance activities on its
own behalf or on behalf of a branch thereof.
Insurance
Broker
: A legal person licensed by the CBUAE and acts as independent intermediary
in insurance and reinsurance operations between an insurance or re -
insurance applicant on the one side and any Comp any on the other side,
and receives, in consideration of its efforts, a commission from the
Company with which insurance or reinsurance is concluded.
Surveyor and
Loss Adjuster
: A Person licensed or authorized by the CBUAE to detect and assess the
damage incurred as a result of the insured risk.
Insurance
Consultant
: A Person licensed or authorized by the CBUAE to examine insurance
requirements for their clients and give advice in respect of the suitable
insurance coverage, assists in preparing insurance requirements and
receives their fees from their clients.
Actuary
: A Person licensed or authorized the CBUAE to set the value and price of
Insurance Policies, and to asses the technical provisions, accounts and all
Federa l Decree Law of 2023 Regulating Insurance Activities 4
matter related thereto.
Health
Insurance
Claims
Management
Company
: A legal Person licensed the CBUAE to engage in health insurance claims
management business.
Insurance -
Related
Professionals
: Any Person licensed or authorized the CBUAE to operate as an Insurance
Agent, Insurance Broker, Surveyor and Loss Adjuster, Insurance Consultant,
Actuary or health insurance claims manager, or any other profession related
to insurance as determined and regulated by a resolution of the Board.
Branch
: A branch of the Company that carries out insurance activities in its own
name.
Premium
: An amount of money paid or payable by the Insured under the Insurance
Policy and is called "Contribution" in Takaful insurance.
Authorized
Manager
: A natural Person appointed b y a foreign insurance Company to manage its
branch in the State.
Senior
Employee
: Any Person who occupies an executive position equivalent to the functions
of a director -general, Authorized Manager or the deputy or assistant of
either one, or any department director, internal audit director or branch
manager.
Federa l Decree Law of 2023 Regulating Insurance Activities 5
Technical
Provisions
: Provisions which the Insurer must deduct and retain to cover the Insured's
accrued financial obligations vis -a-vis the Insured, pursuant to the
provisions of this Dec ree-Law.
Solvency
Margin
: A surplus in the value of the Company's existing assets over its liabilities to
such an extent that enables it to fulfil all its obligations and pay the required
insurance payouts once they become due without impeding the Company's
business or weakening its financial position.
Minimum
Guarantee
Fund : An amount equal to one third of the required Solvency Margin or the
amount determined by the Board, whichever is greater.
Auditor
: A Person authorized to carry out accou nting and audit functions in the
State.
Takaful
Insurance
: A collective contractual scheme intended to achieve solidarity and
cooperation among a group of contributors to address certain risks, where
each one pays an amount of money called "contribution" to be deposited in
a Takaful insurance fund through which compensation is to be paid to
eligible persons when a risk is sustained.
Higher Sharia
Authority
[HAS]
: The authority established under Federal Decree -Law No. (14) of 2018,
referr ed to hereinabove.
Federa l Decree Law of 2023 Regulating Insurance Activities 6
Person : A natural and legal Person.
Commercial
Register
: The Register established with the competent authority under Federal
Decree -Law No. (37) of 2021, on the Commercial Register, or any other
superseding law.
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finance and banking | Federal Decree-Law No. (48) of 2023 Regulating Insurance Activities | Article (2)
Scope of Application
1. The provisions of this Decree -Law shall apply to the following categories:
a. Insurance Companies and Insurance -Related Professions; and
b. Holding companies that control or acquire (15%) of the volume of insurance
business in the State, or whose insurance activity and related services represent more
than (50%) of their revenues. The Board shall issue the controls governing the
operation of such Companies in the insurance activity.
2. The provisions of this Decree -Law s hall not apply to the Companies operating in the
financial Free Zones, save as specifically provided for in this Decree -Law.
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finance and banking | Federal Decree-Law No. (48) of 2023 Regulating Insurance Activities | Article (3)
Insurance Concept
An insurance is a contract whereby the Insurer undertakes to pay the Insured or the eligible
Beneficiary an amount of money, an arranged revenue or any other monetary compensation
in case the insured incident or risk has occurred, in return for Premiums or any other regular
payments to be paid by the Insured to the Insurer.
Federa l Decree Law of 2023 Regulating Insurance Activities 7
Chapter Two
Insurance Business
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finance and banking | Federal Decree-Law No. (48) of 2023 Regulating Insurance Activities | Article (4)
Insurance Types
The insurance business shall be divided into the following types:
1. Insurance of Persons and fund accumulation operations; and
2. Property and liability insurance.
The resolutions, statutes, regulations and instructions issued by the Board shall determine the
insurance activities that fall under each insurance type of the above.
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finance and banking | Federal Decree-Law No. (48) of 2023 Regulating Insurance Activities | Article (5)
Compulsory Insurance
The Board may impose compulsory insurance against some risks under any regulatio ns
whereby the controls and conditions of insurance and other provisions related thereto are
identified.
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finance and banking | Federal Decree-Law No. (48) of 2023 Regulating Insurance Activities | Article (6)
Insurance Services Fees
1. The CBUAE shall charge fees for supervision and control, in addition to any other
chargeable fees for the services provided the CBUAE under the provisions of this Decree -
Law, including the services of issuing licenses and permits.
2. The Board shall issue a resolution determining the fees referred to in Clause (1) above,
and shall publish the same in the Official Gazette.
Federa l Decree Law of 2023 Regulating Insurance Activities 8
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finance and banking | Federal Decree-Law No. (48) of 2023 Regulating Insurance Activities | Article (7)
Establishment of Funds
The CBUAE may establish funds with an independent legal person for the purpose of
protecting policyholders, Beneficiaries and aggrieved persons. A resolution shall be issued by
the Board specifying the method of forming such funds and their objectives, mechanism of
finance, risks covered by them and benefits they provide when such risks occur, methods of
their termination and the provisions of their liquidation.
Chapter Three
Functions of the Board and the Governor
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finance and banking | Federal Decree-Law No. (48) of 2023 Regulating Insurance Activities | Article (8)
Functions of the Board
The Board shall adopt the policies, regulations and rules necessary for regulating insurance
business, pursuant to this Decree -Law, including the following:
1. The Solvency Margin and the Minimum Guarantee Fund controls according to the
generally -accepted international standards in this regard;
2. Basis of calculating the Technical Provisions;
3. Reinsurance criteria and controls;
4. Basis of investing the Company's assets;
5. Determining the Company's assets that meet the a ccrued insuring obligations;
6. Accounting policies to be adopted by the Company and the required forms to prepare
and present financial statements;
7. Basis of developing accounting books and records of the Companies, Agents, and
Brokers, along with determining the data to be recorded in such books and records;
8. Records which the Company commits itself to maintain and the description of such
Federa l Decree Law of 2023 Regulating Insurance Activities 9
records, as well as data and documents that must be furnished to the CBUAE;
9. Conditions, controls and ethics for practicing the insurance and reinsurance activity and
the Insurance -Related Professions;
10. Anti -money laundering and combating terrorism financing and the financing of illegal
organizations in insurance activities, in cooperation with the relevant authoritie s;
11. Insurance policy rates it deems appropriate and the technical grounds thereof;
12. Controls and conditions for licensing the Companies and the Insurance -Related
Professionals;
13. Minimum capital for the Companies and the Insurance -Related Professionals;
14. Rules and controls necessary to protect clients of the Companies and Insurance -Related
Professionals and provide them the appropriate Insurance Coverage;
15. Conditions, rule and controls for approving Auditors of the Companies and the
Insurance -Related Professionals and their obligations;
16. Setting out and determining the Emiratization targets in the insurance sector, monitoring
the compliance with such targets and imposing penalties and fines on the Companies
and the Insurance -Related Professiona ls that do not comply with the same, and to that
end, it may coordinate with the relevant authorities or may entrust them with any of
such functions; provided that the Board shall set a mechanism for the retention and
disposition of amounts of such fines, and the CBUAE shall submits an annual report to
the Cabinet on the Emiratisation targets and the actions that have been taken to achieve
such targets;
17. Regulating Takaful Insurance business, including the provisions and procedures for
appointing and approvi ng the Sharia Supervisory Committee and the conditions
required to be fulfilled by its members;
18. The financial reporting system and the external audit of the Companies and the
Insurance -Related Professionals;
Federa l Decree Law of 2023 Regulating Insurance Activities 10
19. Regulations, rules, standards, directives and instructions related to inspection operations
and procedures of the Companies and the Insurance -Related Professionals; and
20. Regulations, rules and standards related to the competency of the Senior Employee.
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finance and banking | Federal Decree-Law No. (48) of 2023 Regulating Insurance Activities | Article (9)
Functions of the Gov ernor
1. The Governor shall issue the policies, regulations, statutes, instructions and rules
approved by the Board, and shall issue the resolutions and instructions necessary for
implementing the same.
2. The Governor shall be responsible for applying the provi sions of this Decree -Law and
the CBUAE's regulations and the Board's resolutions issued in pursuance thereof.
3. The Governor may delegate his functions set forth herein to any of his deputies,
assistants or other Senior Employees of the CBUAE; provided that the delegation is in
writing and for a specific period.
Chapter Four
Insurance Companies
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finance and banking | Federal Decree-Law No. (48) of 2023 Regulating Insurance Activities | Article (10)
Engagement in Insurance Business
Any of the following Persons licensed the CBUAE may engage in insurance business in the
State:
a. An Insurance Company incorporated as a public joint -stock company in the State; and
b. A branch of a foreign Insurance Company.
Federa l Decree Law of 2023 Regulating Insurance Activities 11
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finance and banking | Federal Decree-Law No. (48) of 2023 Regulating Insurance Activities | Article (11)
Prohibition of Combination of Insurance Operations
1. Insurance Companies may not combine persons and fund accumulation insurance
operations and property and liability insurance operations.
2. Existing companies licensed to carry out the two types of insurance before issuing
Federal Decree -Law No. (6) of 2007, referred to hereinabove, shall remain in practice.
3. The Companies referred to in Clause (2) above shall comply with the following controls:
a. Complete separation between persons and funds accumulation insurance operations
and property and liability insurance operations in terms of technical, financial,
technolog ical, administrative and legal procedures and the relevant technical,
administrative and financial systems and staff, except for the Company's Director
General; and
b. Drawing up all financial reports and statements required by virtue of this Decree -
Law and t he Board's instructions and resolutions on a unified aggregate basis, and on
the basis of the separation between persons and funds accumulation insurance
operations and property and liability insurance operations.
4. Notwithstanding the provisions of Clause (2) above, the Cabinet may, at the proposal of
the Board, issue a resolution obligating Insurance Companies to adjust their affairs
pursuant to the provisions of Clause (1) above, or may issue a resolution that such
Companies remain carrying out the two types of insurance and while being prohibited
from issuing new Insurance Policies combining the property and liability insurance and
the persons and funds accumulation insurance operations, in accordance with the
controls and requirements set by the C abinet in this regard.
Federa l Decree Law of 2023 Regulating Insurance Activities 12
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finance and banking | Federal Decree-Law No. (48) of 2023 Regulating Insurance Activities | Article (12)
Insurance with a Company Abroad
1. Insurance brokerage for funds or property existing in the State or for the liabilities arising
therefrom may only be carried out by an Insurance Company licensed under the
provisions of this Decree -Law.
2. The Company may reinsure any property inside and outside the State.
3. No Person may conclude an Insurance Policy with an Insurance Company outside the
State to cover any money or property in the State or liabilities arising therein. No lega l
person in the State may insure its personnel in the State with an Insurance Company
outside the State.
4. Notwithstanding the provisions of Clause (3) above, insurance may be made with an
Insurance Company in the State in case the required Insurance Coverag e is not available
in the State, or Insurance Companies abstain from, or unable to provide such coverage,
or for any other reasons decided the CBUAE, in accordance with the controls and
conditions determined by the Board in this regard.
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finance and banking | Federal Decree-Law No. (48) of 2023 Regulating Insurance Activities | Article (13)
Insurance Policy Language
1. The Insurance Policy shall be drawn up in the State in Arabic, and an accurate translation
into any other language may be attached therewith. In case of discrepancy in the
translation of the policy, the Arabic text shall prevail.
2. The policy's clauses exempting the Insurance Company from liability shall be written in
bold with a different colour, and must be approved by the Insured beforehand.
3. Insurance Policies may be electronically issued, in accordance with the terms and
conditio ns established by virtue of a resolution by the Board.
Federa l Decree Law of 2023 Regulating Insurance Activities 13
4. Notwithstanding the provision of Clause (1) above, the Governor may exclude certain
Insurance Policies from the condition of being drawn up in Arabic if so requested the
CBUAE.
Chapter Five
Governan ce of the Companies
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finance and banking | Federal Decree-Law No. (48) of 2023 Regulating Insurance Activities | Article (14)
General Framework of Governance
The CBUAE shall set the general framework for governance of the Companies, as well as the
regulations and rules for organizing the work of their boards of directors. the CBUAE shall also
set the conditions that must be fulfilled by board candidates and the conditions for appointing
their Senior Employees; provided that the Companies whose securities are listed on financial
markets of the State shall comply with the governance requirements issued by SCA.
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finance and banking | Federal Decree-Law No. (48) of 2023 Regulating Insurance Activities | Article (15)
Conditions of Appointment of Board Member, Director General or
Authorized Manager of the Company
A Person to be appointed as a board member, Director General or Authorized Manager of the
Company must:
1. Have never been convicted of a felony or misdemeanor involving moral turpitude and
breach of trust or of insolvency, unless rehabilitated; and
2. Have never been punished with any administrative sanction determined by a decision of
the Board, on the grounds of committing a v iolation of any of the provisions of this
Decree -Law or Federal Decree Law No. (32) of 2021, referred to hereinabove, in his
Federa l Decree Law of 2023 Regulating Insurance Activities 14
capacity as a Director General or board member of a Company or beneficial owner
thereof or controlling over its capital, including the liability for causing loss, bankruptcy
or liquidation of the Company.
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finance and banking | Federal Decree-Law No. (48) of 2023 Regulating Insurance Activities | Article (16)
Prohibitions
1. The Company's chairman, board member, Director General and Authorized Manager or
who acts on their behalf shall be prohibited from:
a. Engaging in managing other competing Insurance Company or any company that
carries out the same or similar Insurance activity;
b. Competing the Company's business or carrying out any action or activity that
conflicts with the Company's interest;
c. Practicing as an Insuranc e Agent or Broker; or
d. Receiving a commission for any insurance operation.
2. Any Person who assumes the management of the Company or any employee thereof
may not be a representative of any shareholder of the Company.
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finance and banking | Federal Decree-Law No. (48) of 2023 Regulating Insurance Activities | Article (17)
Conditions for Appointment of Senior Employee
1. In order for a Senior Employee to be appointed, he/she must fulfil the same conditions
set forth in article (15) above, in addition to the fulfillment of the qualifications,
efficiency and expertise requiremen ts necessary for carrying out insurance operations.
The Company shall provide the CBUAE with a detailed statement containing the
academic qualifications, practical experience and documents supporting the above.
2. The Board shall issue a resolution defining t he academic qualifications, the practical
Federa l Decree Law of 2023 Regulating Insurance Activities 15
experience and the documents referred to in Clause (1) above.
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finance and banking | Federal Decree-Law No. (48) of 2023 Regulating Insurance Activities | Article (18)
Vacant Position
The Company shall notify the CBUAE in case the position of the Company's board member,
Director General, Senior Employee or Authorized Manager becomes vacant. The Company's
board of directors or the Company, as the case may be, shall fill the vacant position within a
period not exceeding (30) days from the date of being vacant, after obtaining the approval of
the CBUAE.
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finance and banking | Federal Decree-Law No. (48) of 2023 Regulating Insurance Activities | Article (19)
Providing the CBUAE with Meeting Minutes
The Company's board of directors shall provide the CBUAE with copies of the board's minutes
of meetings and decisions related to the election of the Company's chairman, vice -chairman
and members authorized to sign on behalf of the Company and their specimen signatures,
within (7) seven days from date on which such decisions are issued.
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finance and banking | Federal Decree-Law No. (48) of 2023 Regulating Insurance Activities | Article (20)
Resignation of Board Members
Should the chairman and board members submit their resignations or should the vacant
positions reach one quarter of the Company's board members, the Governor shall:
1. Form an interim committee comprising experienced and specialized individuals and
appoint a chairman and vice -chairman thereto to assume the m anagement of the
Company;
2. Call for a general meeting within a period not exceeding (3) three months following date
Federa l Decree Law of 2023 Regulating Insurance Activities 16
of forming the committee, renewable for a similar period only once, in order to elect a
new board of director of the Company. The Company sha ll bear the committee's
remunerations, as decided by the Governor.
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finance and banking | Federal Decree-Law No. (48) of 2023 Regulating Insurance Activities | Article (21)
Protection of the Company
1. The CBUAE shall take whatever measures it deems appropriate for the proper
functioning of the Company's business, in accordance with the controls d etermined by
the Board. To that end, the CBUAE may:
a. Request to hold a general meeting to discuss any subject the CBUAE deems critical;
b. Request to include any item the CBUAE deems necessary to be included on the
Company's general meeting agenda, even while the general meeting is being held;
and
c. Stay the execution of any decision issued by the Company's general meeting if it
contradicts the laws or regulations in force.
2. If the Company's general meeting is unable to take a decision on the appointment of its
Auditor, or if the appointed auditor rejects the appointment for any reason whatsoever,
the CBUAE may appoint an Auditor for a period of one fiscal year and determine their
fees at the Company's expense.
3. If the Company's general meeting is unable to ap point members of the Sharia
Supervisory Committee, pertaining to Companies where such committee is required, or
if this appointment is not possible for any reason, the CBUAE may appoint the members
of the Committee and fix their remunerations at the expens e of the Company.
Federa l Decree Law of 2023 Regulating Insurance Activities 17
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finance and banking | Federal Decree-Law No. (48) of 2023 Regulating Insurance Activities | Article (22)
Publication of the Call to the General Meeting
1. The Company may publish a call to hold the general meeting in newspapers only
following the approval of the CBUAE of the publishing. The Company may only include
any additional items on the general meeting's agenda subject to prior approval of the
CBUAE.
2. Subject to the provisions of Clause (1) above, a Company whose securities are listed on
financial markets may publish an invitation to the general meeting in newspaper s only
following the approval of SCA.
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finance and banking | Federal Decree-Law No. (48) of 2023 Regulating Insurance Activities | Article (23)
Technical Provisions and Reserves Required to be Maintained
The Company, in implementation of the instructions issued by the Board, shall maintain the
following:
1. Solvency margin and the Minimum Guarantee Fund, as per the type of insurance carried
out by the Company;
2. Technical Provisions estimated at the end of each fiscal year; and
3. Reserves to be maintained in the State.
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finance and banking | Federal Decree-Law No. (48) of 2023 Regulating Insurance Activities | Article (24)
Appointment of Actuary
The Company licensed to engage in insurance business shall appoint or approve a registered
actuary, pursuant to the provisions of article (65) hereunder, within one month from date of
being granted the license, and shall so notify the CBUAE within one month from the date of
appointment or approval of the Actuary.
Federa l Decree Law of 2023 Regulating Insurance Activities 18
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finance and banking | Federal Decree-Law No. (48) of 2023 Regulating Insurance Activities | Article (25)
Insurance Pool
Insurance Companies may together create one or more insurance pool(s) to provide an
Insurance Coverage of any branch of insurance or any specific operation for the benefit of the
pool, pursuant to the bylaw of each pool; provided that the CBUAE's prior approval is
obtained .
Chapter Six
Obligations of the Company
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finance and banking | Federal Decree-Law No. (48) of 2023 Regulating Insurance Activities | Article (26)
Payment of Compensation
The Insurance Company shall pay the compensation set out in the Insurance Policy to th e
Insured or to the Beneficiary, as the case may be, as soon as the insured incident occurs or the
insured risk is realized. Whereupon, the Insurance Company shall subrogate the Insured for
the indemnity it paid for damage in claims of the Insured vis -à-vis the party causing the
damage for which the Insurance Company's liability has arisen.
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finance and banking | Federal Decree-Law No. (48) of 2023 Regulating Insurance Activities | Article (27)
Insurance of Vehicles
The Insurance Company shall conclude the Insurance Policy for all motor vehicles licensed in
the State when so requested by stakeholders. The Board shall set the insurance rates as
commensurate with the severity of risks.
Federa l Decree Law of 2023 Regulating Insurance Activities 19
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finance and banking | Federal Decree-Law No. (48) of 2023 Regulating Insurance Activities | Article (28)
Provision of Data and Information
1. The Companies and the Insurance -Related Professionals shall provide any data or
information requested the CB UAE about them or about any Company possessively
related or associated therewith in any manner whatsoever, within the time limit set the
CBUAE.
2. The Company's Board of directors shall invite the CBUAE to attend the general meeting
before at least (15) fifte en days from date of its convention. the CBUAE may assign one
of its employees to represent it for such purpose.
3. the CBUAE may assign one or more of its employees to verify or audit any of the
Company's transactions, records or documents, within the normal business hours of the
Company. The Company shall put any of the aforesaid at the disposal of the so assigned
employee and shall cooperate with him to enable him to fully perform his duties.
4. CBUA may, based on the audit result, assign experts, consultants, Actuaries or Auditors
to audit/check the Company's operations, evaluate its positions and submit a report
thereon. The Company shall cooperate with them in a manner that enables them to fully
perform their duties. The company shall bear their remunerations, as determined the
CBUAE for any one of them.
5. The expert, consultant, Actuary or Auditor may not disclose to any third party
whatsoever any information concluded under Clause (4) above without obtaining the
CBUAE's written approval, except fo r the disclosure that is based on a court order.
Federa l Decree Law of 2023 Regulating Insurance Activities 20
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finance and banking | Federal Decree-Law No. (48) of 2023 Regulating Insurance Activities | Article (29)
Financial Reports
1. The Company shall provide the CBUAE with a detailed annual report on its operations
signed by the board chairman, the Authorized Manager or authorized signatories of the
Com pany, including the annual financial statements, financial reports reflecting detailed
profits and losses of the type of insurance carried out by the Company and each branch
thereof and the Auditor's report, within a period not exceeding (3) three months f rom
the end of the fiscal year. the CBUAE shall be delivered a copy of the report, at least (15)
fifteen business days before inviting to the general meeting.
2. The Company shall present the financial accounts and statements referred to in Clause
(1) above o nly after obtaining the CBUAE's approval.
3. The board chairman or Director General shall promptly notify the CBUAE if the
Company is exposed to serious financial or administrative situations compromising
rights of the Insured or Beneficiaries.
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finance and banking | Federal Decree-Law No. (48) of 2023 Regulating Insurance Activities | Article (30)
Insurance Policy Forms
1. The Company shall provide the CBUAE with forms of the Insurance Policies and their
approved annexes, including the general and special terms and conditions, the technical
grounds of such policies and the Premiums rates annexed thereto, and shall provide the
CBUAE with schedules of the redemption values of life Insurance Policies and funds
accumulation operations and the premiums rates annexed thereto.
2. Where the public interest requires or in case of imperf ection that may compromise the
interests of Policyholders, the CBUAE may request the Company to introduce an
amendment to the forms of Insurance Policies and their approved annexes, within the
Federa l Decree Law of 2023 Regulating Insurance Activities 21
period determined the CBUAE for such purpose.
3. The Company shall provide the Insured and the Beneficiaries with copies of the
Insurance Policies and the annexes thereof after the amendment is introduced, within
the time limit set the CBUAE.
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finance and banking | Federal Decree-Law No. (48) of 2023 Regulating Insurance Activities | Article (31)
Disclosure and Transparency
The Companies shall comply with the principles of disclosure and transparency while dealing
with the Insured and the Beneficiaries and in all policies, documents, leaflets, advertisements,
publicity, articles and scientific materials issued by them, which are regulated by a resolution
by th e Board.
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finance and banking | Federal Decree-Law No. (48) of 2023 Regulating Insurance Activities | Article (32)
Auditor
1. The Company's Auditor shall submit a prompt report to the CBUAE, with a copy thereof
to the Company's board chairman in any of the following cases:
a. If they found out that the financial position of the Company does not enable it to
fulfill its obligations vis -a-vis the Insured or Beneficiaries or hinders its capacity to
fulfil the financial requirements set forth in this Decree -Law and the resolutions,
regulations, statutes and instructions issued thereunder related to t he financial
position of the Company;
b. If they found out that there is grief imperfection in the Company's performance of its
financial procedures, including entering data in its accounting records, and the
existence of material deficiencies in the internal controls that could pose a threat to
its financial position and stability;
Federa l Decree Law of 2023 Regulating Insurance Activities 22
c. If they refuse or have reservations in respect of any certificate or statement issued by
the Company related to its income or financial statements;
d. If they fail to express their op inion on the Company's financial statements due to
material misrepresentations or fraud;
e. If they find out that the Company does not comply with the laws, resolutions,
regulations, statutes and instructions related to the Company's financial statements;
and
f. If they decide to resign or their reappointment to the Company is rejected.
2. the CBUAE may request the Auditor to furnish it directly, within a specific period, with
the information needed to monitor the Company's operations.
3. When the Audito r recommends that the financial statements filed thereto by the board
of directors be rejected, the Company's general meeting shall decide the following:
a. To return the financial statements to the Company's board of directors and ask the
latter to correct t he statements according to the Auditor's observations and are
deemed approved after the observations are corrected.
b. To refer the subject to the CBUAE to appoint a committee of expert Auditors and fix
their remunerations to be charged by the Company to adju dicate the subject matter
of the dispute between the Company's board of directors and its Auditor. Having
been presented again to, and approved by the general meeting, the Committee's
decision shall be binding and the financial statements shall be adjusted as per the
committee's decision.
Federa l Decree Law of 2023 Regulating Insurance Activities 23
Chapter Seven
Measures, Sanctions and Grievance
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finance and banking | Federal Decree-Law No. (48) of 2023 Regulating Insurance Activities | Article (33)
Measure and Sanctions
1. the CBUAE may conduct regular inspection of the Companies to ensure the soundness of
their financial positions and their compliance with the provisions of this Decree -Law and
the technical bases of carrying out insurance and reinsurance operations. To that end,
the CBUAE may verify that the Company complies with the following:
a. Its fulfillment of its obligations and that the CBUAE shall not be held liable for its
failure to do so or its inability to continue in business;
b. The Company does not commit any violation of the provisions of this Decree -Law or
the resolutions, regulations, statutes or instructions issued in pursuance t hereof;
c. The adequacy of measures taken by the Company on the reinsurance of risks
assumed by the same;
d. Compliance with the license conditions necessary to engage in insurance business;
e. The Company's total losses shall not exceed (50%) fifty percent of its paid -up capital;
and
f. It shall not cease to conduct its business without legitimate justification.
2. Where the Company fails to comply with any provisions of Clause (1) above, the CBUAE
may impose whatever measures or sanctions it deems appropriate, and i t may impose
one or more of the following actions:
a. Serving a notice describing the nature of violation, procedures for remedying it and a
mechanism for regularization.
b. Requesting the Company or the headquarters of a foreign insurance company, as the
case m ay be, to take the necessary measures to regularize the administrative
Federa l Decree Law of 2023 Regulating Insurance Activities 24
situations therein, including deposing the Company's Director General, Authorized
Manager or any Senior Employee thereof.
c. Deposing the Company's chairman and any board member proved to be responsible
for the current status of the Company.
d. Forming a neutral committee of experts to replace the Company's board of directors
for a period not exceeding (6) six months, renewable for similar period(s), if
necessary, and in all cases th e total periods may not exceed (24) twenty four months,
defining its functions and appointing its members, chairman and vice -chairman. The
Company shall bear the committee's fees, as determined the CBUAE. The procedures
for electing and forming a new board of directors shall be proceeded pursuant to the
provisions of Federal Decree -Law No. (32) of 2021, referred to hereinabove, at least
(30) thirty days before the expiry of the committee's work.
e. Taking the necessary actions to merge the Company into another Company, subject
to the approval of the Company into which it will be merged.
f. Preventing the Company from concluding new Insurance Contracts or preventing it
from carrying out one or more type of insurance.
g. Setting out a threshold limit for the total amou nts of Premiums that the Company
receives from the Insurance Policies issued by the same.
h. Maintaining assets in the State equivalent in value to all net obligations arising from
its business in the State, or a certain percentage of its value determined the CBUAE.
i. Restricting the Company's engagement in any of its investment activities related to
the Solvency Margin ratio, or obliging it to liquidate its investments in any of such
activities for such purpose, unless the same would cause harm to the Company, as
determined by the specialized expert.
j. Appointing an independent supervisory member from outside the CBUAE to attend
the Company's board meetings and participate in discussions, without having a vote,
Federa l Decree Law of 2023 Regulating Insurance Activities 25
during decision -making, and the Board shall determine his functions and fees.
k. Suspension of the Company's license.
l. Revocation of the Company's license.
m. Restructuring of the Company.
n. Liquidation of the Company.
o. Imposing a fine on the Company not exceeding (AED 100,000,000) one hundred
million dirhams.
3. The provisions of Clauses (1) and (2) above shall apply to the Insurance -Related
Professionals, as commensurate with the nature of their professions.
4. The measures set out in Clause (2) above shall be imposed by virtue of a resolution of
the Govern or, other than the measures referred to in Paragraphs (e), (l), (m) and (n),
which shall be imposed by a resolution of the Board.
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finance and banking | Federal Decree-Law No. (48) of 2023 Regulating Insurance Activities | Article (34)
List of Violations and Fines
The Board shall issue a list of violations committed by the Companies and the Ins urance -
Related Professionals, pursuant to the provisions of this Decree -Law and the fines imposed
thereon.
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finance and banking | Federal Decree-Law No. (48) of 2023 Regulating Insurance Activities | Article (35)
Filing Grievances Against CBUAE's Decisions
1. A grievance committee shall be established by the CBUAE to consider grievances filed
against decisions, measures and administrative sanctions issued pursuant to the
provisions of this Decree -Law. The Board shall issue the necessary decisions on the
formation of the committee, rules of procedure, remunerations of its members, experts
Federa l Decree Law of 2023 Regulating Insurance Activities 26
to be engaged and all matters related thereto.
2. Save as regulatory and supervisory policies, resolutions, regulations, directives and
instructions. The committee referred to in Clause (1) above shall decide on grievances
against the CBUAE's decisions, pursuant to the provisions of this Decree -Law and the
resolutions issued in pursuance thereof.
3. A grievance against a the CBUAE's decision shall be made within (20) twenty business
days from the date of notification of the decision in accordance with the mechanism
determined by the Board. The committee shall not accept grievances submitted after this
time limit.
4. Decisions falling within the competence of the Committee, pursuant to the provisions of
this Article, may not be challenged before courts before a grievance ag ainst them is filed
and decided.
5. No grievance may be filed before the committee set out in Clause (1) above against
decisions issued the CBUAE, pursuant to the provisions of Clause (2) of article (41)
hereunder.
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finance and banking | Federal Decree-Law No. (48) of 2023 Regulating Insurance Activities | Article (36)
Inspection
1. the CBUAE may assign any of its employees or any other licensed or authorized Person
to inspect the Company or any other Company owned by such Company or is affiliated
thereto, in order to ensure the soundness of its financial position and its compliance with
the provis ions of this Decree -Law and the resolutions, regulations, statutes and
instructions issued in pursuance thereof, as well as other laws and regulations in force in
the State.
2. the CBUAE shall coordinate with the relevant regulatory authority in case of the
inspection of Companies owned by the Insurance and Reinsurance Companies,
Federa l Decree Law of 2023 Regulating Insurance Activities 27
Insurance -Related Professionals or associated Companies, which are governed by the
regulatory authorities.
3. the CBUAE may, in coordination with the relevant authorities in the State, i nspect
premises of any Person suspected to engage in any insurance and reinsurance business
or the Insurance -Related Professions. To that end, the CBUAE may obligate the
suspected Person to provide all information, documents and records related thereto and
to seize them.
4. The Companies and the Insurance -Related Professionals and companies owned by and
affiliated to the same shall provide the inspector with whatever data, information,
records, books, accounts and documents related to the subject of the inspec tion on the
dates specified by him.
5. The inspector may collect the necessary information and clarifications from any Person
with whom the Company or the owner of the Insurance -Related Profession has a
relationship with regard to the subject of the inspectio n.
6. The inspector may summon any Person at the time and place specified by them to
provide information, data, documents or records related to the inspection.
7. the CBUAE may assign one of its employees or a specialized expert to guide the
Company and the Insurance -Related Profession or supervise some operations within a
specific period determined the CBUAE. If the expert is from outside the CBUAE, the
Company and the Insurance -Related Profession shall pay his fees determined as
determined the CBUAE.
8. The Co mpany and the Insurance -Related Profession shall bear all expenses of inspection
and investigation that another person is assigned to carry out, pursuant to the provisions
of Clause (1) above, if it is proved that it violates the provisions of this Decree -Law and
the statutes and resolutions issued in pursuance thereof.
Federa l Decree Law of 2023 Regulating Insurance Activities 28
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finance and banking | Federal Decree-Law No. (48) of 2023 Regulating Insurance Activities | Article (37)
Facilitation of Inspection
The Companies and Insurance -Related Professionals or any of their managers or employees
may not:
1. Prevent, obstruct, or hinder any employee or any o ther Person assigned the CBUAE from
carrying out inspection or audit under the provisions of this Decree -Law;
2. Conceal any data, records or books requested the CBUAE or whoever is assigned to carry
out inspection or audit; and
3. Issue any statements or give any inaccurate or misleading data, records or books.
Chapter Eight
Funds of Insurance Companies
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finance and banking | Federal Decree-Law No. (48) of 2023 Regulating Insurance Activities | Article (38)
Bank Deposit Amount
Every Insurance Company shall make a cash deposit in a bank operating in the State, as a
security for implementing its obligations set forth in this Decree -Law, the amount of which
shall be determined as follows:
1. (AED 4,000,000) four million dirhams for person and fund accumulation insurance
referred to in Clause (1) of article (4) above.
2. (AED 6,000,000) six million dirhams for property and liability insurance referred to in
Clause (2) of article (4) above.
By virtue of a resolution of the Board, the amount of the deposit referred to in Clauses (1) and
(2) above may be increased. The deposit shall be made to the order of the Governor.
Federa l Decree Law of 2023 Regulating Insurance Activities 29
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finance and banking | Federal Decree-Law No. (48) of 2023 Regulating Insurance Activities | Article (39)
Disposition of the Bank Deposit
The deposit may only be disposed of for the payment of debts arising from insurance
operations carried out by the Company; provided that a prior written authorization of the
Governor or his representative is obtained.
If the value of the deposit diminishes below the prescribed limit if it is disposed of, the
Company shall replenish the deposit amount within a period not exceeding (30) thirty days
from the date of the CBUAE's request to replenish the deposit amount.
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finance and banking | Federal Decree-Law No. (48) of 2023 Regulating Insurance Activities | Article (40)
Mathematical Reserve of the Company
The Company that carries out the type of insurance referred to in Clause (1) of article (4)
above must keep in the State funds whose value is at least equivalent to the full amount of
the mathematical reserve of contracts concluded in the State or implemented therein. The
Board may reduce the percentage of reserve the Company is required to keep.
Such funds must be completely separated from the fun ds of other insurance operations.
When calculating the aforementioned reserve, the deposit referred to in Clause (1) of Article
(38) above shall be taken into account, so that whichever value is greater shall be applicable.
Chapter Nine
License
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finance and banking | Federal Decree-Law No. (48) of 2023 Regulating Insurance Activities | Article (41)
Approval and License
1. No Company may be incorporated in the State, and no branch of a foreign Insurance
Company may be opened and no new branch may be added without the approval of the
CBUAE.
Federa l Decree Law of 2023 Regulating Insurance Activities 30
2. No Person may engage in insurance business without having the relevant license issued
the CBUAE, which may, as it deems appropriate for the need of the national economy,
approve or reject the issuance of the license, and in case of rejection, the CBUAE shall be
reasoned.
3. The Board shall revoke the license if it has been issued based on false information.
4. No unlicensed Company may issue the Insurance Policy. Any Insurance Policy
concluded by an unlicensed Company shall be null and void, and a bona fide affected
party may claim compensation.
5. The Board shall s et the controls and requirements necessary for implementing the
provisions of Clauses (1) and (2) above.
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finance and banking | Federal Decree-Law No. (48) of 2023 Regulating Insurance Activities | Article (42)
Reinsurance Controls
The Company may not reinsure with another Company unless the other Company is licensed
to carry out the insurance type entrusted to reinsure it according to the regulations issued by
the Board.
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finance and banking | Federal Decree-Law No. (48) of 2023 Regulating Insurance Activities | Article (43)
Fiscal Year
The fiscal year of the Company shall commence on 1st January and end on 31st December
every year. However, the first fiscal year shall commence from the date of its registration in
the Commercial Register and end on 31st December of the following year.
Federa l Decree Law of 2023 Regulating Insurance Activities 31
Chapter Ten
Suspension and Revocation of the Company's License
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finance and banking | Federal Decree-Law No. (48) of 2023 Regulating Insurance Activities | Article (44)
Cases of the Company's Suspension
The Governor may suspend the Company from carrying out one or more types of insurance
for a period not exceeding one year, while informing both the Company and the relevant
authority of the suspension decision, in any of the following cases:
1. In case the Company violates th e provisions of this Decree -Law or the resolutions,
regulations, statutes or instructions issued thereunder;
2. In case the Company lacks of any of the conditions required to be fulfilled in the license
under the provisions of this Decree -Law;
3. In case the Company fails to engage in business by carrying out any type of insurance
covered by the license, or ceases to engage in such business for of one year;
4. In case the Company is unable to fulfill its financial obligations; and
5. In case the Company refrains fro m implementing a final court judgement related to the
Insurance Policy;
The Company that has been suspended from carrying out one or more types of insurance shall
implement its obligations that had been arisen before the suspension decision is issued.
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finance and banking | Federal Decree-Law No. (48) of 2023 Regulating Insurance Activities | Article (45)
Removal of Suspension or License Revocation Reason
1. If the Company removes, within a period not exceeding one year from the date on which
the suspension decision is issued, the suspension reason, the Governor shall issue a
decision approving it to continue in insurance business, and the CBUAE shall inform the
relevant authority and the Company of the decision.
Federa l Decree Law of 2023 Regulating Insurance Activities 32
2. In the event that the time limit referred to in Clause (1) above expires and the Company
fails to remove the suspension reason, the Board shall delicense the type of insurance
subject of the suspension, and the CBUAE shall so inform the company and the relevant
authorities.
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finance and banking | Federal Decree-Law No. (48) of 2023 Regulating Insurance Activities | Article (46)
Impacts of Suspension or Revocation of the License
1. The procedures related to the suspension of business or revocation of the license for one
or more types of insurances under the decisions issued by the Board in this regard.
2. The issuance of a decision to suspend the business or revoke the license for one or more
types of insurance shall:
a. Prohibit th e conclusion of Insurance Policies for one or more types of insurance
subject of suspension or Revocation; and
b. Consider all rights and obligations arising from Insurance Policies concluded before
the suspension of business or revocation of the license effective and the Company
shall be liable for the same.
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finance and banking | Federal Decree-Law No. (48) of 2023 Regulating Insurance Activities | Article (47)
Relicensing the Company
If the license revocation reason is removed, the Company may, within a period not exceeding
one year from the date on which the revocation decision is issued, submit an application to
the CBUAE for licensing, accompanied by the documents proving the removal of the license
revocation reason. The Board may issue its decision on approval or rejection, provided that
the decision is reasoned, and the CBUAE shall inform the Company and the relevant
authorities of the decision.
Federa l Decree Law of 2023 Regulating Insurance Activities 33
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finance and banking | Federal Decree-Law No. (48) of 2023 Regulating Insurance Activities | Article (48)
Rejection of Relicensing Application
1. Where the Board rejects the relicensing application for all types of insurance, or if the
Company fails to submit a rel icensing application, within the time limit referred to in
article (47) above, the Company shall go into liquidation within a period not exceeding
one month from the date of expiry of such period or from the date of being notified of
the rejection decision . If the Company fails to go into liquidation, it shall be liquidated in
accordance with the provisions of this Decree -Law.
2. The Company shall be delicensed if a liquidation decision is issued against pursuant to
the provisions of this Decree -Law, a final court judgement of its liquidation is rendered
or is declared bankrupt under the legislation in force in this regard.
Chapter Eleven
Foreign Insurance Companies and Representation Offices of Foreign
Insurance Companies
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finance and banking | Federal Decree-Law No. (48) of 2023 Regulating Insurance Activities | Article (49)
Branch of Foreign Insurance Company
1. A foreign Insurance Company's branch shall appoint a manager to manage the branch,
who is authorized by a document attested by the relevant authorities to exercise all the
powers necessary to manage such br anch, including:
a. Issuing Insurance Policies and annexes thereof and paying the compensations arising
therefrom;
b. Representing the Company's branch before the CBUAE, competent court and other
relevant authorities; and
c. Receiving communications, notices and all correspondence served to the Company.
Federa l Decree Law of 2023 Regulating Insurance Activities 34
2. Before the engagement in Insurance Business, a foreign Insurance Company's branch
shall submit an application to the CBUAE for licensing the branch; provided that the
manager's appointment decision and the document referred to in Clause (1) above shall
be attached to the application.
3. The foreign Insurance Company's branch shall notify the CBUAE of the Authorized
Manager's name within one month from his appointment date, and shall appoint a
substitute within one mont h from the date on which position becomes vacant.
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finance and banking | Federal Decree-Law No. (48) of 2023 Regulating Insurance Activities | Article (50)
Bank Guarantee
The foreign Insurance Company's branch shall submit an irrevocable letter of bank guarantee
in favor of the CBUAE, in an amount not less than (AED 100,000,000) one hundred mil lion
dirhams in case of engagement in insurance activity, and an amount not less than (AED
250,000,000) two hundred fifty million dirhams in case of engagement in reinsurance
activity, in accordance with the instructions issued by the Board in this regard.
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finance and banking | Federal Decree-Law No. (48) of 2023 Regulating Insurance Activities | Article (51)
Final Account
The Foreign Insurance Company's branch shall provide the CBUAE with the total final
account, and shall publish it in two local daily newspapers, one of which is published in
Arabic.
Federa l Decree Law of 2023 Regulating Insurance Activities 35
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finance and banking | Federal Decree-Law No. (48) of 2023 Regulating Insurance Activities | Article (52)
Representation Offices of Foreign Insurance Companies
1. Representation offices of foreign Insurance Companies may not carry out their activities
related to insurance in the State before obtaining the relevant license from the CBUAE.
2. the CBUAE shall issue a r esolution regulating the functions of such offices.
3. The license shall be either accepted or rejected by virtue of a resolution of the Board, and
the CBUAE shall so notify the relevant authorities.
Chapter Twelve
Insurance Companies of Persons and Fund A ccumulation Operations
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finance and banking | Federal Decree-Law No. (48) of 2023 Regulating Insurance Activities | Article (53)
Policies Issued by Insurance Companies
The Companies engaged in insurance business for persons and fund accumulation operations
may not distinguish between the policies issued of the same type; in terms of insurance rat es,
the amount of profits distributed to policyholders or other requirements, unless such
distinguishment is generated from a difference in life chances for policies where the lifetime
has an effect, except for:
1. Reinsurance policies;
2. Insurance Policies of amounts that enjoy certain discounts according to the price lists
communicated to the CBUAE; and
3. Insurance Policies that include special conditions on the life of members of a single
family or a group of individuals related by a single professi on/job or any other social
bond.
Federa l Decree Law of 2023 Regulating Insurance Activities 36
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finance and banking | Federal Decree-Law No. (48) of 2023 Regulating Insurance Activities | Article (54)
Insurance Policy Rate Discount
Based on the Company's request, the CBUAE may agree to issue policies at discounts less the
normal prices if there are reasons that justify the same.
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