Following the introduction of Value Added Tax (VAT) on January 1 this year, the United Arab Emirates (UAE) Federal Tax Authority has clarified the import procedures non-VAT registered businesses should follow.
Under the VAT procedures, non-registered businesses seeking to import into the UAE must follow standard customs procedures, and must either complete a declaration and pay through the e-Dirham system or through the eServices portal on the FTA website; via a clearing company approved by the FTA at the port of entry; via a freight forwarder approved by the FTA; or via a courier company where the goods are delivered to the importer.
Tax-News.com reports that in addition to following standard procedures when importing for re-export, transit, or temporary admission, non-registered businesses must also provide a guarantee for the tax due on the imported goods in question, either by entering a previously obtained e-Guarantee reference number on the e-Services portal; via a clearing company approved by the FTA at the port of entry; or via a freight forwarder approved by the FTA.
It would be recalled that the UAE Minister of State for Financial Affairs, His Excellency Obaid Humaid Al Tayer, had stated that the UAE will implement VAT at the rate of 5% on 1 January 2018.
He unveiled the fiscal proposal in Dubai on 24 February last year after a joint press conference with Christine Lagarde, Managing Director of the International Monetary Fund (IMF).
Specifically, VAT is expected to be introduced at a rate of 5% with some limited exceptions including basic food items, healthcare and education.
While the UAE stated the implementation of the new VAT regime on 1 January this year, other GCC countries may do so at the same time or by 1 January 2019 at the latest.