Import VAT and the reverse charge: a guide for UAE traders

How it works

Goods imported into the UAE are subject to 5% VAT. A VAT-registered business that has linked its Tax Registration Number to its customs code generally does not pay this VAT at the border. Instead, it declares the import VAT as output tax in its VAT return and, where entitled, recovers the same amount as input tax in the same return.

What has to match

• Customs declarations for every import in the period
• The import VAT figures the FTA pre-populates from customs data
• Your purchase invoices and stock records
• The values reported in your VAT return

Common errors

• Imports left out of the VAT return because no VAT was paid at the border
• Customs value and invoice value never reconciled
• Imports made under another company's customs code
• Goods moved from a designated zone into the mainland without accounting for VAT

If you are not registered

Where the importer is not VAT registered, VAT is usually paid at the time of import before the goods are released. If your imports and local sales together pass the AED 375,000 registration threshold, registering lets you use the reverse charge and stop funding VAT at the border.