Import VAT in the UAE: when you pay it, when you defer it, how you recover it

Goods brought into the UAE from abroad are subject to 5% VAT on import, alongside any customs duty. For a VAT-registered business the VAT is usually cash-neutral — declared and recovered in the same VAT return — but only when the import is set up correctly. When it is not, the VAT has to be paid before customs releases the goods.

What the VAT is charged on

Import VAT is 5% of the value of the goods for customs purposes, including insurance and freight, plus any customs duty and any excise tax payable on the import. VAT itself is not part of the value. Goods brought into a designated zone, and goods that are zero-rated or relieved on import, follow different rules that are not covered here.

VAT-registered importer: deferring through the return

A VAT-registered business that imports goods for its business can account for the import VAT under the reverse charge. Instead of paying at customs, it declares the VAT in the VAT return for the period of the import and — where the goods are used for taxable supplies — recovers the same amount as input tax in that return. The net cash effect is usually nil.

This works only where, at the time of import:

• the business can show its VAT registration (its Tax Registration Number, TRN);
• the business has its own customs registration number, verified by customs; and
• the import details allow the FTA to verify the import.

Where these conditions are not met, the VAT has to be paid before customs releases the goods, even for a registered business.

Not VAT-registered: paying before release

A business that is not registered for VAT pays the import VAT before the goods are released — through the FTA's online services or through a clearing agent. It cannot recover that VAT through a VAT return, because it does not file one. For a growing importer, this is one reason to check whether voluntary registration makes sense; see voluntary VAT registration.

Recovering import VAT

• Who imported? The importer is the person acting as importer for customs. If a courier or supplier clears the goods in its own name, the import is theirs, not yours — check whose name and customs code is on the declaration.
• Evidence. Keep the customs declaration and the commercial invoice for every import. These, not the supplier's invoice alone, support the VAT figures.
• Business use. Input VAT is recoverable on goods used for taxable supplies. Where goods are used for exempt supplies or private purposes, recovery is restricted.
• Reconcile each quarter. Agree the import VAT in each return to the customs declarations for the quarter and to your own import records before the return is filed.

Imported services

Services bought from overseas suppliers — software, marketing, consulting — are not cleared through customs, but a VAT-registered business generally accounts for VAT on them under the reverse charge in its return, in the same way. Overseas platform and software fees are often missed.

How we help

• We check that your customs registration and TRN are set up so imports can be accounted for through the return.
• We record imports from the customs declarations each month and reconcile the import figures before each VAT return.
• We review recovery where goods serve both taxable and other purposes.

Quarterly VAT returns start at AED 499^* a quarter on our Starter package. See our VAT return packages or send us a recent customs declaration and we will check how your imports are being treated.