UAE FTA Decision No. 7 of 2026: New Procedures for the Disposal of Seized and Abandoned Goods
Effective from 30 July 2026
The UAE Federal Tax Authority (FTA) has issued Federal Tax Authority Decision No. 7 of 2026, dated 11 June 2026, establishing procedures and controls for the storage, movement, sale and disposal of certain seized and abandoned goods.
The Decision provides a structured framework for dealing with goods that are seized by the FTA or abandoned in circumstances where their condition, nature or storage requirements may create a risk of deterioration, shortage, leakage or damage. It also sets out the process for selling such goods through public auction and the order in which the resulting sale proceeds are to be applied.
1. Scope of the Decision
The Decision applies specifically to seized or abandoned goods that fall within one or more of the following categories:
- Perishable goods;
- Goods that are susceptible to shortage or leakage; or
- Goods whose condition may pose a risk to other goods, facilities or the surrounding environment.
Accordingly, the Decision does not establish a general mechanism for the disposal of all seized or abandoned goods. Rather, it focuses on goods for which continued storage or retention may result in deterioration, loss or safety concerns.
2. Storage and Movement Requirements
The Decision introduces specific controls governing the storage and movement of seized goods.
The FTA is required to determine appropriate storage and transportation conditions based on the nature of the goods, with the objective of preserving their condition, quality and quantity. This is intended to ensure that the goods remain capable of being returned to their owner, where applicable, or preserved for valuation and potential sale.
The FTA may store the goods either at its own facilities or through an external service provider where specialised storage conditions are required. Similarly, transportation may be undertaken using designated government vehicles or, where necessary, through an external service provider.
Importantly, the Decision requires the FTA to maintain stocktaking records before, during and after the movement of goods, with the records reconciled against the actual inventory.
Additional controls include:
- Reports documenting the required storage conditions and selected storage location;
- Periodic reports monitoring the condition of stored goods;
- Stocktaking reports;
- Access records for security purposes; and
- Records tracking the movement of goods to and from storage locations.
These requirements establish a clear audit trail over the goods from the point of seizure or abandonment through to their eventual return, sale or disposal.
3. When Can Seized or Abandoned Goods Be Sold?
Under Article 4, the FTA may sell seized or abandoned goods following a decision of the relevant committee, provided that specified conditions are satisfied.
The goods must:
- Be perishable, subject to shortage or leakage, or present a risk to the facility or surrounding environment;
- Remain unclaimed after the owner or its representative fails to retrieve them following settlement of the applicable taxes, administrative penalties and related expenses, or after the owner’s rights to retrieve the goods have otherwise been exhausted or waived;
- Still retain value and have not become valueless due to deterioration; and
- Be legally permitted to be sold and circulated within the UAE, except where the goods are sold for export.
Where the goods have been seized as part of an investigation or are connected with ongoing legal proceedings, the FTA must obtain the approval of the Public Prosecution or the competent court, as applicable, before proceeding with the sale.
4. Public Auction Process
Once the conditions for sale have been satisfied, the goods are to be sold through a public auction following a decision by the relevant committee.
The owner or its representative must be notified of:
- The decision to sell;
- The reasons for the sale; and
- The date of the sale.
The FTA will engage a licensed auction service provider to conduct the auction in accordance with criteria established by the committee.
These criteria may cover matters including:
- The reserve price;
- The auction methodology;
- Payment and delivery arrangements;
- Participation requirements;
- The method of announcing the auction; and
- Procedures where an auction is incomplete.
Following the sale, the goods will be handed over to the successful buyer, and the committee will issue a sale certificate evidencing completion of the sale and transfer of ownership.
Once the goods have been handed over, the FTA will not bear subsequent liability relating to their use or circulation by the buyer.
Where goods cannot legally be sold within the UAE domestic market but are permitted to be sold for export, the buyer will be required to provide the FTA with evidence confirming their export.
5. How Will the Sale Proceeds Be Applied?
One of the key provisions of Decision No. 7 of 2026 is the prescribed order for allocating the proceeds generated from the public auction.
The proceeds will be applied in the following order:
First: Costs associated with the public auction, including storage and movement costs.
Second: Tax liabilities due from the taxpayer from whom the goods were seized or whose goods were abandoned.
Third: Administrative penalties due from that taxpayer.
Fourth: Any remaining amount may, where the owner has exhausted its right to retrieve the goods, be credited to the owner’s tax account.
Finally: Where the owner has expressly waived its right to recover the remaining amount, the FTA may treat the amount as part of its other revenues.
This waterfall mechanism is particularly relevant to taxpayers whose goods are subject to seizure, as the sale proceeds may ultimately be applied against outstanding tax liabilities and administrative penalties after the costs associated with the sale and storage of the goods have been settled.
6. Key Considerations for Businesses
Decision No. 7 of 2026 reinforces the importance of businesses taking prompt action where goods are seized by the FTA.
Taxpayers whose goods have been seized or abandoned should consider the following:
Prompt settlement and retrieval
Where applicable, taxpayers should seek to settle outstanding tax liabilities, administrative penalties and related expenses and exercise their rights to retrieve the goods as soon as possible.
Maintain supporting documentation
Businesses should maintain comprehensive documentation relating to the ownership, value and nature of goods, as well as any correspondence with the FTA concerning their seizure, storage or retrieval.
Monitor goods subject to seizure
Given that the Decision specifically addresses perishable, leaking or otherwise potentially hazardous goods, delays in resolving the underlying matter may increase the risk that the goods become unsuitable for return or sale.
Understand the implications of an auction
Once the conditions under the Decision are satisfied and the relevant sale decision is issued, the goods may be sold through public auction. Taxpayers should therefore understand the applicable procedures and available rights before the sale process progresses.
7. What Does the Decision Mean for Taxpayers?
Decision No. 7 of 2026 provides greater procedural clarity around the FTA’s handling of certain seized and abandoned goods.
From a taxpayer perspective, the Decision is particularly relevant because it establishes a defined process through which goods may move from seizure or abandonment, to storage and monitoring, and ultimately to public auction and allocation of the sale proceeds.
The Decision also provides greater transparency regarding the treatment of any residual proceeds following the settlement of auction, storage and movement costs, taxes and administrative penalties.
Businesses should therefore ensure that any matters involving seized goods are addressed promptly and that appropriate records are maintained to support their ownership and rights in respect of the goods.
Conclusion
Federal Tax Authority Decision No. 7 of 2026 introduces a formal framework governing the storage, movement, sale and disposal of certain seized and abandoned goods in the UAE. The Decision is particularly relevant to goods that are perishable, susceptible to shortage or leakage, or potentially hazardous to other goods or facilities.
With the Decision effective from 30 July 2026, businesses should be aware of the circumstances in which seized or abandoned goods may be sold and the manner in which the resulting proceeds will be allocated.
Taxpayers affected by the seizure or abandonment of goods should consider obtaining appropriate professional advice to assess their position, including their rights to retrieve the goods, outstanding tax and penalty liabilities, and the potential implications of a public auction.
