In UAE VAT, the import of products is below opposite rate mechanism. The registered taxpayer uploading items will ought to pay VAT on the time of submitting VAT Return UAE. Though the charge of VAT is deferred to the VAT go back submitting date, the price of products on which VAT Registration wishes to be paid is decided on the time of customs clearance.
In case of home resources, the price of resources is extensively the transaction price (complete attention much less VAT) however in case of imports, the price of products is arrived at after thinking about the diverse charges and responsibilities related to the imports.
The UAE VAT Law, presents the tips for figuring out the price of imported items. According to the UAE VAT Registration Law, the import price of products is composed of:
Customs price decided according with Customs Legislation
Including the price of insurance, freight and
Any customs charges and Excise Tax invoice paid at the Import of the Goods.
The valuation approach followed in customs is composed extensively of the CIF Values (Cost, Insurance, and Freight). The customs responsibility payable is calculated at the whole transport price, which incorporates the price of the imported items, the price of freight and the price of insurance. Customs responsibilities were constant to 5% of the CIF price for maximum merchandise. However, alcoholic merchandise are concern to 50% responsibility and tobacco merchandise are assessed at 100% customs responsibility.
Once the price mentioned above is decided, the customs responsibility might be levied on CIF Value after which at the sub-total (CIF + Customs responsibility), excise responsibility if relevant might be levied. The Rate of Excise Duty in UAE differs primarily based totally at the product. Excise Duty is charged at 50% on carbonated drinks, 100% for tobacco merchandise and power drinks.
Finally, on the overall price (CIF + Customs Duty + Excise Duty), VAT at 5% might be levied.
Value of Goods
+Value of Fright and Insurance
+Customs Duty
+ Excise Duty
From the above, it’s far clean that the price of import isn’t always simply the price of products however additionally consists of diverse charges related to the import and the Customs responsibility and Excise relevant on the products imported. Let us apprehend the calculation of import price withinside the following cases:
Import of products with out Excise Duty
Import of products with Excise Duty
Import of Goods with out Excise Duty
Import Value
Amount in AED
Value of Goods (FOB Value)
200,000
(+) Value of Freight and Insurance
20,000
Customs Declared Value (CIF Value)
220,000
(+) Customs Duty at 5% (220,000*5/100)
11000
Total Value of Import
231,000
VAT at 5% (231,000*5/100)
11550
In the above case, the price of import items for the motive of VAT Dubai consists of the price of products + Freight and Insurance + Customs Duty.
Import of products with Excise Duty
Import Value
Amount in AED
Value of Goods (FOB Value)
2,00,000
(+) Value of Freight and Insurance
20,000
Customs Declared Value (CIF Value)
2,20,000
(+) Customs Duty at 5%
11000
Total Value of Import
2,31,000
(+) Excise Duty at 50%
115500
Total Value of Import after Excise responsibility
3,46,500
(+) VAT at 5%
17325
In the above case, the price of import items for the motive of VAT Dubai consists of the price of products + Freight and Insurance + Customs Duty + Excise Duty.
