VAT Payment on Import of Goods

Tally Solutions | Updated on: February 5, 2020

Import of goods is a very common scenario in business. There are various scenarios of import of goods. These can be broadly divided into 2 categories:

Import of goods by a registrant
Import of goods by a non-registrant

As a general rule, we know that on import of goods into UAE, the importer is liable to pay VAT on reverse charge basis. In addition, based on the type of person who is importing the goods, there are multiple scenarios of import of goods. The mode of payment of VAT in each of these scenarios is different. In this article, let us see a summary of each of these scenarios and the mode of payment of VAT on import in these scenarios.

Import of goods by a registrant in UAE

Listed below are the various scenarios of import of goods by a person registered under VAT and the mode of VAT payment in each of these scenarios.

Scenario	Mode of payment of VAT
Import of taxable goods into the UAE mainland	File VAT returns and pay the VAT due at the time of filing returns
Import of goods into UAE and then exporting the goods to another country
Transfer taxable goods from one VAT designated zone to another VAT designated zone	VAT is not applicable
Import of taxable goods into a VAT designated zone	VAT is not applicable

Import of goods by a non-registrant in UAE

Listed below are the various scenarios of import of goods by a person who is not registered under VAT and the mode of VAT payment in each of these scenarios.

Scenario	Mode of payment of VAT
Import taxable goods into UAE mainland	Pay on import
Import of goods into UAE and then export to another country (not under customs suspension)	Pay on import
Transfer taxable goods from one VAT designated zone to another VAT designated zone	Provide e-guarantee
Import taxable goods into UAE under customs duty suspension	Provide e-guarantee
Import taxable goods into a VAT designated zone	VAT is not applicable
Traveller bringing in taxable goods valued up to AED 3,000
Import of returned goods (return of goods exported from UAE) into UAE mainland
A UAE national living abroad or expat coming into UAE for the first time, importing used personal effects and household items
The military and internal security forces importing taxable goods into the mainland

Hence, when a person registered under VAT imports goods, he/she has to pay VAT on the import while filing the VAT returns, wherever VAT is applicable. When a person who is not registered under VAT imports goods, he/she has to either pay the VAT on import or provide an e-guarantee, wherever VAT is applicable. In our upcoming article, we will see the process for VAT payment in each of these scenarios in detail.