Import VAT: what it means in UAE tax.

What import vat means

Also called: VAT on imports.

Import VAT is the VAT charged when goods are brought into the UAE from outside the country. The VAT law puts imports of goods within the scope of the tax alongside local supplies, at the standard rate of 5%. The tax is calculated on the value of the import, which starts from the customs value and includes insurance, freight, customs charges and any excise tax paid on the goods.

How it is paid depends on the importer. A VAT registered business that meets the Executive Regulation conditions, including linking its customs registration to its tax registration, does not pay VAT at the border. It treats the import as a supply to itself under the reverse charge and declares the tax in the VAT return for the period of import, where it can usually recover the same amount as input tax. An unregistered importer, or a registered one that does not meet the conditions, must pay the VAT before customs releases the goods.

For an SME that buys stock from overseas suppliers, getting this right keeps cash out of the border and keeps the VAT return complete. Goods placed under customs suspension, such as a customs warehouse, or brought into a Designated Zone from abroad are not treated as imported at that point.

How it works

• Article 2 of the VAT law taxes imports of goods, and Article 3 sets the standard rate of 5%.
• Article 35 sets the value: the customs value under customs legislation, including insurance, freight, customs fees and any excise tax paid on import. The FTA's import guide confirms the VAT is calculated on a value that includes customs duty.
• A registered importer uses the reverse charge under Article 48, Clause 1, if it meets the conditions in Article 48 of the Executive Regulation, including giving the FTA its customs registration number, and keeps the supplier invoice and the customs statement of value.
• An unregistered importer, or one that does not meet those conditions, pays the VAT before release under Article 49 of the law and Article 50 of the Executive Regulation.
• From 1 January 2026, Federal Decree-Law No. 16 of 2025 removed the need to issue a self-invoice when applying the reverse charge, but supporting documents must still be kept.
• Failing to calculate tax due on an import carries a penalty of 50% of the unpaid or undeclared tax.

Worked example

A VAT registered electronics wholesaler in Dubai imports a consignment into the mainland. Its customs code is linked to its TRN, so it uses the reverse charge.

Customs value including freight and insurance	AED 200,000
Customs duty shown on the declaration	AED 10,000
Value for import VAT	AED 210,000
Import VAT at 5%, declared as output tax	AED 10,500
Same amount recovered as input tax	AED 10,500
Net VAT cash cost	AED 0

Under the reverse charge the import VAT is declared and recovered in the same return, so a fully taxable business carries no cash cost.

Common mistakes

• Not linking the customs registration number to the TRN, so VAT is paid in cash at the border instead of being declared under the reverse charge.
• Leaving imports off the VAT return because no cash was paid at the border, which exposes the business to a penalty of 50% of the undeclared tax.
• Calculating VAT on the supplier's invoice price rather than on the customs value plus duty and any excise tax.

The law

• Federal Decree-Law No. 8 of 2017 on Value Added Tax, Article 2 (Scope of Tax), Article 3 (Tax Rate), Article 35 (Value of Import), Article 48 Clause 1 (Reverse Charge) and Article 49 (Import of Concerned Goods)
• Cabinet Decision No. 52 of 2017 (VAT Executive Regulation), Article 47 (General Rules regarding Import of Goods), Article 48 (Reverse Charge on Import) and Article 50 (Special Rules of Import)
• Cabinet Decision No. 40 of 2017 on Administrative Penalties, as amended by Cabinet Decision No. 129 of 2025, Table No. 1, item 15

Frequently asked questions

Does an unregistered business pay import VAT?

Yes. It pays the VAT before customs releases the goods, and because it is not registered it cannot recover that VAT as input tax.

Is import VAT due when goods land in a Designated Zone?

Goods brought into a Designated Zone from outside the UAE are not treated as imported at that point. Moving them on to the mainland is dealt with on the designated zone page.

Related terms

Reverse charge mechanism · Designated zone · Input tax · Excise tax. See every term in the UAE tax glossary.

For the full picture, read our guide: Reverse Charge VAT in the UAE: When It Applies and How to Handle It.

Need help with VAT returns? See our VAT returns service.