Importing goods is a common scenario in the economy. There are various scenarios for importing goods. These fall into two general types.
Import of Goods by a Registered Person
Import of Goods by an Unregistered Person
As a general rule, we know that when importing goods into the UAE, the importer is required to pay her VAT. Reverse charging principle. Additionally, there are multiple scenarios for importing goods, depending on the type of person importing the goods. How VAT is paid differs for each of these scenarios. This article provides an overview of each of these scenarios and how to pay his VAT on import in these scenarios.
Import of Goods by a Registered Person in the United Arab Emirates
Below are the different scenarios of import of goods by a VAT registered person and how he pays his VAT in each of these scenarios.
Scenarios
How to pay VAT
Importation of taxable goods into UAE mainland
Filing of VAT return and payment of VAT payable on filing of tax return
Importation of goods into UAE and subsequent Export Import of goods into another country
Transfer of taxable goods from one VAT zone to another
VAT does not apply
Import of taxable goods into a VAT zone
VAT does not apply
Import of Goods by Foreign Persons – UAE
Registered Persons Below are the different scenarios of import of goods by non-VAT registered individuals and how the VAT is paid in each of these scenarios.
Scenario
Mode of payment of VAT
Import taxable goods into UAE mainland
Pay on import
In the case of importing goods into the UAE and then exporting them to another country, VAT is not applicable. However, when transferring taxable goods from one VAT designated zone to another, VAT must be paid. Additionally, when importing taxable goods into the UAE under customs duty suspension or into a VAT designated zone, VAT is applicable.
For travelers bringing in taxable goods valued up to AED 3,000, VAT is not applicable. The same applies to the import of returned goods (goods exported from the UAE) into the UAE mainland.
If a UAE national living abroad or an expat coming into the UAE for the first time imports used personal effects and household items, VAT is not applicable.
However, the military and internal security forces importing taxable goods into the mainland are subject to VAT.
In summary, when a person registered under VAT imports goods, they must pay VAT on the import while filing VAT returns, wherever VAT is applicable. On the other hand, if a person who is not registered under VAT imports goods, they must either pay the VAT on import or provide an e-guarantee, wherever VAT is applicable. In future articles, we will provide a detailed explanation of the VAT payment process for each of these scenarios.
1. When importing goods into the UAE and then exporting them to another country, VAT is not applicable. However, when transferring taxable goods between VAT designated zones, VAT must be paid.
2. VAT is applicable when importing taxable goods into the UAE under customs duty suspension or into a VAT designated zone.
3. Travelers bringing in taxable goods valued up to AED 3,000 are exempt from VAT.
4. VAT is not applicable when importing returned goods (goods exported from the UAE) into the UAE mainland.
5. UAE nationals living abroad or expats coming into the UAE for the first time are not required to pay VAT when importing used personal effects and household items.
6. The military and internal security forces are subject to VAT when importing taxable goods into the mainland.
7. Registered VAT importers must pay VAT on imports while filing VAT returns, wherever applicable.
8. Non-registered VAT importers must either pay VAT on import or provide an e-guarantee, wherever applicable.
9. Future articles will provide a detailed explanation of the VAT payment process for each of these scenarios.
You can also register for VAT Registration on our website:
https://www.vat-registration-uae.com/