VAT Payment on Import by Unregistered Person in UAE

Tally Solutions | Updated on: February 5, 2020

In business, there are scenarios where unregistered businesses import goods and have to pay VAT on import. As these businesses are unregistered, the VAT to be paid on import is not collected at the time of return filing. Such persons need to pay VAT on import in a different manner. There are 2 main methods for payment of VAT on import by unregistered persons. The method to be chosen depends on the scenario of import. The 2 methods for payment of VAT on import by unregistered persons are:

• Pay VAT on import
• Pay VAT through e-guarantee

In this article, let us discuss the scenarios where unregistered persons should pay VAT on import and the process for the same.

Scenarios for VAT Payment on Import

The scenarios where unregistered persons should pay VAT on import are:

• Import of goods from outside UAE to the UAE mainland
• Import into UAE to export the goods to non-GCC VAT implementing States and it is not considered under customs duty suspension
• Import into UAE to export the goods to a GCC VAT implementing State and it is not considered under customs duty suspension

Let us now understand the process by which unregistered persons have to pay VAT on import in these cases:

Process for VAT Payment on Import

1. Customs declaration

The importer should prepare and submit the customs declaration in the respective Customs portal and do the following:

• Provide the necessary details about all the goods being imported
• Submit customs declaration for processing by Customs

Once the declaration is approved, it moves to 'Pending tax payment' status.

2. Await settlement by Customs

A customs official will validate the declaration details and approve the declaration. The importer will receive a notification that the declaration is approved.

The Customs declaration will be sent to the FTA by the Customs Authority.

Note: Once the Customs declaration is sent to the FTA, the customs system will not allow any further editing of the form. The status of the declaration form can only be changed to either 'Approved' or 'Declined'.

3. Create an e-Services account on FTA portal

Unregistered persons should create an e-Services account on the FTA portal to pay for VAT Payment on import.

The sign-up process is as follows:

• Sign up as a new user by entering your email ID and a unique password.
• You will receive an email at the registered email ID asking you to verify your email ID.
• Once your email ID is successfully verified, your e-Services account will be created and you can login to the FTA e-Services portal.

4. Login to the FTA portal and make the payment of VAT Payment

The final step is for unregistered persons to login to the FTA portal and pay the VAT due on import. Import VAT is calculated on the value of the goods + Customs duty + Excise duty.

The steps to pay VAT on the FTA portal have been discussed in detail in our article 'Steps to pay VAT in FTA portal'.

Hence, the process for unregistered persons to pay VAT on import of goods is different from the process for registered persons. In our next article, we will see the process for unregistered persons to pay VAT on import of goods through e-guarantees.