VAT on Import and Export in UAE

Overview

The UAE VAT system treats imports and exports differently to ensure tax compliance while supporting international trade.

• Exports are generally zero-rated to promote global trade.
• Imports are subject to VAT under the reverse charge mechanism (RCM) for VAT-registered businesses.

VAT on Imports in UAE

When you import goods into the UAE:

• If you’re VAT registered: VAT is accounted for via Reverse Charge Mechanism (RCM) in your VAT return — no payment at customs.
• If you’re not VAT registered: VAT is collected at customs clearance before goods are released.

How Reverse Charge Works

Under RCM:

• You declare both output VAT and input VAT in your VAT return.
• The net effect is zero if goods are for taxable business use.

Example:
You import machinery worth AED 100,000.

• Output VAT: AED 5,000 (declared in VAT return)
• Input VAT: AED 5,000 (claimed back)
• Net VAT payable: AED 0

Customs Considerations

• Provide your TRN to customs to benefit from RCM.
• If using Designated Zones, VAT rules differ — VAT is not applied until goods are moved into the mainland.

VAT on Exports from UAE

Exports are zero-rated if:

• Goods leave the UAE within 90 days of supply.
• You have valid customs export documents as proof.

Export Types

1. Direct Exports (you arrange shipping) → Zero-rated
2. Indirect Exports (customer arranges shipping) → Zero-rated if proof of export within 90 days

VAT on Services Export

Services provided to customers outside UAE are zero-rated if:

• The customer is outside GCC VAT territory.
• The service is not related to UAE real estate or UAE-based events.

Required Documents for Zero-Rating Exports

• Customs exit/clearance certificate
• Commercial invoice
• Shipping documents (Airway Bill / Bill of Lading)
• Proof of payment
• Export declaration from Dubai Trade or other emirate’s customs portal

Common Mistakes in Import/Export VAT

• Failing to obtain customs proof for exports → VAT at 5% applied instead of 0%
• Not applying RCM for imports when VAT registered
• Claiming VAT refund without proper documentation
• Misclassifying services as exports without meeting conditions

Most Searched FAQs (2026)

Q: Do I charge VAT for exports to non-GCC countries?
A: No, exports are zero-rated if documentation is in place.

Q: Do imports from Free Zones attract VAT?
A: Yes, when moved into the UAE mainland from non-designated zones.

Q: Can I claim VAT on import duty?
A: VAT is separate from customs duty; you can reclaim VAT if eligible.

Q: Is VAT applicable to temporary imports?
A: Depends on whether goods are returned without alteration; customs exemptions may apply.

Conclusion

VAT rules for imports and exports in the UAE are straightforward when documentation is complete and rules are followed. The reverse charge mechanism for imports and zero-rating for exports make trade VAT-efficient — but only with proper compliance.

Need Help With Import & Export VAT?

At Think Biz Management Consultancies, we help you:

• Apply correct VAT treatment on imports & exports
• Set up reverse charge mechanism in your VAT returns
• Maintain compliant export documentation
• Claim VAT refunds on eligible imports
• Avoid penalties from FTA & customs

 

Contact us today for a free consultation.
We’ll make sure your import and export transactions are VAT-compliant and audit-proof.