1. VAT COMPLIANCE :
A) WITH RESPECT TO GOODS :
♦Responsibility of VAT Compliance is on the Importer/ Exporter
♦In case of Export of Goods, VAT is Zero Rated
♦In case of Import of Goods, Reverse Charge Mechanism applies and liability will fall on the Importer
B) WITH RESPECT TO SERVICES :
♦Responsibility of VAT Compliance is on the Shipping / Logistics Company
2. PROCEDURE FOR IMPORT :
A) FOR REGISTERED IMPORTER
♦Goods shall be cleared by using Importer’s Custom Code & TRN
♦Importer shall pay VAT using Form 301
B) FOR UNREGISTERED IMPORTER
♦ Goods shall be cleared by using Clearing Agent’s Custom Code & TRN
♦ Clearing Agent’s shall pay VAT using VAT 301 or cash payment.However, neither the Agent nor the Importer can recover the paid amount as Input Credit
♦ Agent has to issue a statement to the Unregistered Importer to recover VAT from the Importer
3. LIST OF SERVICES PROVIDED BY LOGISTIC SERVICE PROVIDERS :
◊AIR FREIGHT, SEA FREIGHT , LAND TRANSPORT
◊WAREHOUSING/THIRD PARTY LOGISTICS
◊INSURANCE
◊EXPORT INSPECTION
◊DOCUMENTATION,REPACKAGING,CUSTOM CLEARANCE
◊IMPORTER ON RECORD
4. VAT APPLICABILITY ON INTERNATIONAL TRANSPORT SERVICES :
A) ZERO RATED SERVICE
♦ When service is provided relating to import or export of goods to and from U.A.E in a single chain of transaction
♦ Importing ⇒ Clearing ⇒Delivering
B) STANDARD RATED SERVICE
♦ When service is provided relating to import or export of goods to and from UAE including storage facility
♦ Importing ⇒ Clearing ⇒ Storing ⇒ Delivering
♦ First leg till Import Clearance is Zero Rated
♦ Second leg from Storing till Delivery is Standard Rated
NOTE: If any service is provided to the client who does not have a place of Residence in UAE then it will be treated as Export of Service and is a Zero Rated Service
5. VAT APPLICABILITY ON COURIER SHIPMENTS :
♦ Courier Company charges Import VAT to Importer in addition to their Service Charges
♦ Importer can claim VAT as Input VAT based on the Statement issued by the Courier Company
NOTE : While making import of Shipment through Courier, the Courier Company uses their own Customs Code and TRN to clear the Goods
6. VAT APPLICABILITY ON LAND TRANSPORT SERVICES :
A) WITHIN U.A.E
♦ Not a part of International Transportation
♦ Standard Rated
B) AS A PART OF INTERNATIONAL TRANSPORT
♦ Forming a part of a Single Chain of Service
♦ Zero Rated
C) FROM ONE DESIGNATED ZONE TO ANOTHER/GCC COUNTRIES
♦ VAT has to be paid on the Goods at the Point of Entry into U.A.E Mainland by the Shipping Agent Using Form 301
♦ Once the Goods exit U.A.E/enter the other Designated Zone, the Shipping Agent has to cancel Form 301 by submitting Entry/Exit Documents
7. VAT APPLICABILITY ON WAREHOUSING AND LEASING :
A) WAREHOUSING
♦ Provision of storage space is treated as supply of service
♦ Standard Rated
♦ Example: Storage, handling, packing/co-packing & Other value added services
B) LEASING
♦ Lease/Sub-Lease of whole of premises is treated as supply of Goods
♦ Standard Rated
♦ If the premises is located in Designated Zone, it is out of scope
NOTE:
♦ In a Single facility, Storage Space is provided to multiple clients and charged based on area used.
♦ An entire facility is leased to a Single Client and handling services are also provided
8. OUT OF SCOPE OF VAT APPLICABILITY :
♦ High Sea Sales of Goods / Cross Trade
♦ Provision of Service relating to Transportation of Goods involved in High Sea Sales / Cross Trade
