For goods imported from the UAE, the term “duty suspension” is often used. Let us understand the tariff suspension and its applicable materials.
What is a tariff suspension?
Tariff suspension is an arrangement that does not impose tariffs on certain imported goods. These goods whose tariffs are suspended will not attract import value-added tax.
Which products are being suspended for tariff processing?
Supplies for which tariffs are suspended include:
a. Goods temporarily entering the UAE
b. Goods placed in customs warehouse
C. Cargo enters the UAE during transit
d. Imported goods intended to be re-exported by the same person
Does the suspension of tariffs require financial guarantees?
When an importer imports goods that are deemed to be in a state of tariff reduction, the importer is required to provide a financial guarantee equal to the value of the value-added tax payable at the time of import, and then the goods are allowed to be deemed to be in a state of tariff reduction.
To understand the process of submitting an electronic guarantee, you can refer to our article “The process of paying VAT via electronic guarantee.
What if the designated supplies do not meet the conditions for tariff suspension?
If the imported goods do not meet the conditions for the suspension of tariffs, they will be regarded as goods imported into the UAE and shall be subject to value-added tax.
What is the difference between the goods with postponement of tariffs and the goods exempted from import VAT?
The detailed list of duty-free goods is explained in our article “Imported Goods Without VAT”. Goods in the state of tariff suspension and goods exempt from import value-added tax are all imported goods that are not subject to value-added tax. The main difference between the two is that tariffs will not be levied on goods for which tariffs are suspended, while tariffs can be levied on imports for goods exempt from value-added tax.
Therefore, as long as the required conditions are met, imported products deemed to be in a state of tariff suspension do not need to pay import value-added tax and customs duties.
NO VAT ON IMPORTS OF THESE GOODS
When importing goods or services into the UAE, the importer is responsible for paying value-added tax in a reverse charge. However, certain specific goods are exempt from VAT when imported. When these goods are imported or brought into the UAE, the consignee is not liable for value added tax. Please note that these exemptions should not be confused with customs duty exemptions for certain imported products. These products are only exempt from VAT. Some of these goods are still subject to customs duties. Let us understand the goods that are exempt from import VAT.
a. Goods imported by the army and internal security forces
The import of all departments of the armed forces and internal security forces, such as the import of ammunition, weapons, equipment, military transportation vehicles and their parts and accessories, and any other related materials, are exempt from value-added tax.
b. Personal belongings and gifts accompanied by the passenger
When tourists visit the UAE, their personal belongings and gifts are exempt from VAT. These properties should be non-commercial in nature and should be confirmed under certain conditions.
c. Second-hand personal and household items shipped by UAE nationals returning to the country for the first time or moving to the UAE
Second-hand personal items and daily necessities brought back to the UAE by UAE nationals after living abroad are exempt from VAT. Similarly, when foreigners from other countries immigrate to the UAE for the first time, the used personal and daily necessities they bring are also exempt from VAT.
When goods exported from the UAE are returned or temporarily exported for finishing or repair goods are brought back to the UAE, no value-added tax will be levied.
Therefore, UAE residents and companies can pay attention to these products, which are exempt from VAT when imported.