Imports subject to VAT in UAE include possessions such as cars, jewelry, diamonds, gold which are crucial for traders in the UAE. Due to this, it ranks 20th on imports globally. Out of all the GCC states, the UAE is the one that exports the most. Electronics, precious metals, and gemstones are the main exports from the United Arab Emirates. Its economy ranks 29th globally in terms of exports, while its imports rank 20th.
Are imports subject to VAT?
Under VAT, imports are taxable. When someone who is registered for VAT in the United Arab Emirates imports goods or services, they are required to pay import VAT on a reverse charge basis. This is on top of the customs taxes applied to imports. The following categories apply to the scenarios of import:
- import made by a VAT-registered individual
- import made by a non-VAT registered individual
- Transshipped goods from the UAE to other GCC nations
- goods that are exported from the UAE to other nations
Goods Imports Subject to VAT
A person registered for VAT whose imports subject to VAT in the United Arab Emirates may claim input tax on their imports. Input tax recovery is applicable to taxes, such as excise or customs duties, that are paid by the organization that receives an imported commodity. Starting on the year-end of the invoice date and continuing for a minimum of five years, all transaction-related records must be kept.
Be aware that some goods nevertheless require payment of
customs duty even when they are not subject to VAT. This comprises the
following products:
- Products imported by military forces and internal security agencies, such as military transport vehicles, spare parts, weapons, and ammunition, as well as other relevant supplies and apparatus
- All used personal belongings, such as household items brought into the UAE by citizens returning home or belonging to foreigners moving to the UAE
- Personal belongings and presents of visitors to the United Arab Emirates that are not for commercial use, subject to specific legislative requirements
- Products that are temporarily exported from the UAE for completion or repair and then returned to the UAE free of VAT are known as export returns from the UAE.
What is reverse charge?
Generally speaking, the provider of goods or services is responsible for collecting and paying tax to the Federal Tax Authority (FTA) at the time of provision. We refer to this as a forward charge. The recipient of the supply is responsible for paying the supply’s tax to the Federal Tax Authority under reverse charge. When it comes to imports, the importer registered under UAE VAT is liable for paying the tax as the supplier is not registered in the UAE because they are located outside the country.

What is the import VAT rate that applies?
Imports subject to VAT are levied a rated of 5%. The import of precious metals is the lone exclusion, for which a 0% VAT rate is in effect. To guarantee that imports and domestic supplies are taxed equally, the rate of value-added tax (VAT) applied to imports is maintained at the same level as that on domestic suppliers. The tax paid by the recipient of the supply on imports is eligible for input tax recovery
Do import records have to be kept up to date?
Yes, after the end of the year in which the invoices relate, import records must be kept for a minimum of five years.
As a result, imports and exports are essential business operations for traders in the United Arab Emirates. For these firms to accurately meet the compliance standards and take advantage of VAT, they must be aware of compliance under VAT