Import VAT
When goods are imported into the UAE, import VAT (5%) is due at the point of entry.
How Import VAT is Calculated
Import VAT = 5% × (CIF value + customs duties + excise tax if applicable)
- CIF: Cost, Insurance, and Freight value of the goods
- Customs duties: May apply depending on the HS code and origin
- Excise tax: If the goods are excise products
Payment at Customs
Import VAT is typically paid to UAE Customs at the point of entry, before the goods are released.
Reverse Charge for Imports
Under certain conditions, a registered importer may account for import VAT under the reverse charge instead of paying at customs:
- The importer must be a registered taxable person.
- The importer must be authorized by the FTA for reverse charge on imports.
- The importer accounts for the VAT on their VAT return (output and input, net zero if fully taxable).
This improves cash flow — the importer does not need to pay cash at customs and wait for a refund.
Customs Valuation
The customs value is based on the transaction value — the price actually paid or payable for the goods, plus:
- Transport and insurance costs to the UAE border
- Commissions and brokerage fees
- Packing costs
Free Zone Imports
Goods imported into designated zones (free zones) are generally not subject to UAE import VAT, as they are treated as outside the UAE for customs purposes. However, when goods move from a designated zone to the mainland, import VAT applies.
Worked Example
A Dubai retailer imports electronics worth AED 100,000 (CIF). Customs duty is 5% (AED 5,000). Import VAT = 5% × (100,000 + 5,000) = AED 5,250. The retailer pays AED 5,250 to customs and then claims AED 5,250 as input tax on the next VAT return.