The UAE has one of the biggest economies in the Middle East. Over time, it has developed from a primarily dependent on oil exports to one that has completely utilized its strategic geographic location and diversified to become recognized as a global centre for trade, transportation, and logistics.
Through establishing specified free trade zones with distinct restrictions from the rest of the mainland and free trade agreements that limit tariffs on imports, the UAE has created an environment that is very favourable for foreign investment.
This, along with other prominent advantages such as zero percent 5, reduced import/export duties, low company start-up, and operating costs, and 100% company ownership, makes the UAE’s free zones attractive locations for an import-export sector to establish.
This article will go into the key points to keep in mind when importing and exporting goods into the UAE or one of the many UAE Free zones and the major shipping ports and airports.
How to get Import Code (Custom Code) in Dubai, Abu Dhabi, or anywhere in UAE?
Import code is an ID issued by UAE authorities to UAE importers so that the goods imported can clear UAE customs.
You will get a UAE Import Code once you have a valid Trade Licence, which allows you to import and sell goods in Dubai, Abu Dhabi, the wider parts of UAE, or either of the UAE Free zones.
Note: Import code ID should be renewed annually.
How do I import goods into the UAE?
Air – Sea – Road are three ways in which goods can be imported into the UAE. Many factors must be considered when deciding which solution best meets your needs: available budget, time limits, storage requirements, weight, measurements, and fragility of the products.
UAE’s major ports and airports
The main shipping ports of the UAE are:
- Jebel Ali,
- Mina Rashid,
- Mina Zayed,
- Mina Khalid
- Khor Fakkan
Also, there are major airports located in:
- Dubai
- Abu Dhabi
- Fujairah
- Ras-Al-Khaimah
These provide import-export companies with convenient access to global markets as well as a variety of options for moving freight around the country and abroad.
Which taxes are applicable on imports in the UAE?
UAE Import tax (Custom Duty)
When a private individual or a business company imports goods into a region, an import tax is levied. Import tax rates are usually affected by the amount or category of products and the country of origin.
The rate of import tax in the United Arab Emirates varies from 0% to 5%. Some goods, such as alcohol and tobacco products, are subject to higher tax rates.
Only products with a value of more than AED 1,000 are subject to the UAE import tax, and free-trade zones in the UAE are excluded from paying tax. There is no import tax if the company is working outside the UAE’s free trade zones and importing goods for onward sale. If the goods are shipped onto the mainland of UAE from the Free zone, import tax is levied.
UAE Value-added Tax (VAT)
UAE introduced Value Added Tax (VAT) on 1 January 2018 at a rate of 5%. VAT is applied to the majority of transactions in goods and services. At each stage of the supply chain, the UAE government imposes VAT on tax-registered companies.
If a company’s taxable supplies and imports surpass AED 375,000, it must file for VAT. Otherwise, assume that the total threshold of the company’s taxable supplies and imports is more than AED 187,500. In that case, it can voluntarily register for VAT; however, if the amount of imported goods is less than this, registration is not required.
Read more about VAT: https://www.amaudit.ae/everything-about-vat-in-uae/
UAE Excise tax
The excise tax was first implemented in the United Arab Emirates in 2017. It aims is to reduce the intake of unhealthy and harmful goods while also raising health awareness among its people. A limited number of goods deemed harmful to human health or the environment are subject to excise duty.
Products that come under Excise Tax are as follows:
- Tobacco and tobacco products,
- Energy drinks and carbonated drinks
- E-cigarettes and e-liquids
- Sweetened drinks
Read more on Excise tax: https://www.amaudit.ae/excise-tax-in-uae/
How can AM Audit help with setting up business in the UAE?
AM Audit has extensive teams, expertise, and skills across Dubai, Abu Dhabi, and the rest of the UAE, offering professional assistance and advice to foreign businesses, traders, and investors on how to access the local market.
Contact us at +971 (0) 54 327 8971 or +971 (0) 43 231 738 if you need assistance with VAT or Excise Tax in the UAE or if you need any additional details on any business setup or financials.
We would be happy to assist you.
