How To Claim Input VAT On Imported Goods In UAE?

showing transportation of goods in uae

Understanding the rules for input VAT on imported goods in the UAE is crucial. When importing goods into the country, a VAT rate of 5% is applicable, aligning with the rates applied to similar goods sold domestically.

However, the VAT implementation is influenced by various scenarios, including imports by VAT-registered entities and transshipment to other GCC countries.

The article delves into the tax implementation for both VAT-registered and non-registered importers, outlining the specific conditions under which VAT is applicable or exempt.

For your VAT process to function smoothly, this is a comprehensive guide for a detailed exploration of claiming input VAT on imported goods in the UAE.

How Can You Claim Input VAT On Imported Goods In UAE

Notably, items enjoying a zero-rated VAT status within the country maintain this status upon import. It’s essential to recognize that both VAT and customs duties are mandatory for every import transaction.

To claim input VAT on imported goods, it is important to understand the factors contributing to the increased VAT value. This encompasses various components, including the total amount comprising customs duty or Excise to be paid during the import process.

Additionally, it includes connected expenditures such as insurance, handling, and transportation costs. These costs are incurred from the initial introduction point to the UAE and extend to those associated with onward transportation to the ultimate destination.

VAT Applicable On Imported Goods In UAE

VAT applicability on imported goods depends on the import scenario in the UAE. Conditions vary based on the following: 

  • Imports by entities registered for VAT in the UAE.
  • Goods are transshipped to a GCC country from the UAE.
  • Imports by entities not registered under the UAE VAT system.
  • Goods are imported to the country and then exported to another country.

A 5% VAT rate applies to imports into the country, except for precious metals, which have a zero-rated VAT. The import VAT rate matches the rate for all domestic supplies, ensuring that imported goods are taxed at the same rate as domestic supplies.

Tax Implementation On Importers In UAE:

For VAT-Registered Importers in the UAE (mandatory or voluntary):

TransactionTax Implementation
Import taxable goods to the UAEPay VAT through a tax return
Transfer taxable goods between VAT-designated zonesVAT is not applied
Import goods are subject to taxation in the UAE, followed by exporting them to another country.Pay VAT through a tax return
Import taxable goods to any VAT-designated zone in the UAEVAT is not applicable

For Non-VAT Registered Importers in the UAE:

TransactionTax Implementation
Import taxable goods to the UAE mainlandPay VAT upon importation
Transfer taxable goods between VAT-designated zones in the UAEProvide an e-guarantee
Import taxable goods into the UAE and subsequently export them to another country without customs suspension.VAT is paid on the import
Bring taxable goods into a VAT-designated zone in the UAE through the import process.VAT is not applicable
Travelers or tourists bringing in taxable items valued at no more than AED 3,000VAT, is not applicable
Import taxable goods to UAE with duty suspensionProvide an e-guarantee
Bring back returned goods to the mainland of the UAE, ensuring that the exported items have returned to the country.VAT is not applied.
Internal security and military forces importing taxable supplies into mainlandVAT is not applied.
Residents of UAE living overseas or ex-pats VAT is not applied

How We Can Help You?

If you are seeking expert guidance on VAT for imported goods in the UAE, NOW Consultant, a leading audit firm, is the best option. We can help you understand 5% VAT or tax-exempt imported goods in the UAE.

The expert team of NOW Consultants provides services to a wide range of VAT services, encompassing VAT registration, VAT return filing, VAT audit, VAT refund, VAT accounting, and VAT deregistration.


Can You Recover Import VAT In UAE?

If you’re a registered VAT importer in the UAE, you can claim back the tax you paid on imports. This includes Excise or Customs duty. The tax you paid on imported goods is eligible for recovery as input tax.

Are There Any Goods Exempt From VAT On Imports In The UAE?

The only exception to VAT on imports in the UAE is the import of precious metals, on which a VAT rate of 0% is applicable. All other imported goods are subject to the standard VAT rates as per the regulations in the United Arab Emirates.

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