Travellers, such as visitors or tourists, importing taxable goods worth up to 3,000 UAE dirhams ($817) will not be required to pay the five percent value-added tax (VAT) when the new taxation is implemented on a number of goods and services in the United Arab Emirates from January 1, 2018, the UAE’s Federal Tax Authority (FTA) said in an infographic sent to the media on Wednesday.
The information from the FTA also stated that taxable goods imported into the UAE, and which are destined for a ‘VAT designated zone’, will also not be subject to the five percent VAT from next year. According to the UAE’s executive regulations, which were issued on Wednesday. The details of the VAT designated zones will be specified in a cabinet decree.
In addition, the infographic stated that returned exports will not be subjected to VAT. However, the FTA said that taxable goods imported into the UAE, and then exported to another country, without customs suspension, will be subject to VAT at a standard rate.
VAT will also not apply to Emiratis living abroad or expats coming to the UAE for the first time, who are bringing used personal goods or household items into the country. The five percent tax will also not apply to taxable goods imported into the country by the military or internal security forces.
Below is the FTA’s infographic on the status of imports with regards to VAT:
> Click on the image above to open a high-resolution PDF version in a new tab.
All six members of the Gulf Cooperation Council, Saudi Arabia, the UAE, Kuwait, Bahrain, Qatar and Oman, agreed last year to introduce VAT, as part of a bid to diversity their revenue sources in the face of low oil prices. However, only the UAE and Saudi Arabia have confirmed that they will apply the new tax from next month.
The UAE’s VAT law and executive regulations are both published on the Ministry of Finance website in English and Arabic.
(Writing by Yasmine Saleh; Editing by Shane McGinley)
(yasmine.saleh@thomsonreuters.com)
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