Key takeaways
- UAE import VAT is charged at the standard rate of 5% on the value of the goods, and the value includes insurance, freight, customs duty and excise tax payable on import, but not the VAT itself (Federal Decree-Law No. 8 of 2017, Articles 3 and 35).
- A VAT-registered UAE company normally doesn't pay import VAT at the border: it accounts for the VAT in its own VAT return under the reverse charge, provided it meets four conditions set in the Executive Regulation.
- An importer that isn't VAT-registered, or a registered importer that fails those conditions, must pay the import VAT to the FTA before customs releases the goods.
- Goods moved into a qualifying designated zone from abroad aren't treated as imported into the UAE, so no import VAT arises at that point.
- Import VAT is recoverable as input tax when the goods are used for taxable supplies and you hold the import documents, as of November 2026.
- Imports count towards the AED 375,000 mandatory VAT registration threshold, so a small trading company can become liable to register through imports alone.
What is import VAT in the UAE and how much is it?
Import VAT is VAT charged when goods enter the UAE from abroad, at the standard rate of 5% under Article 3 of Federal Decree-Law No. 8 of 2017. There's no separate or lower rate for imports; the same 5% applies, unless the goods are zero-rated, exempt, or fall under a customs duty exemption or suspension.
The legal "importer" is the person acting as importer for customs clearance on the date of import (Article 1 of the same law). If the declaration names your freight forwarder or a related company, the import VAT sits with that name, not yours.
How is VAT on imports calculated?
Import VAT is 5% of the customs value plus insurance, freight, customs duty and excise tax payable on import, excluding the VAT itself (Article 35). So duty is added to the base before the 5% is applied, which means you pay VAT on the duty.
Say a Sharjah trading company imports goods with a customs value of AED 200,000 that includes insurance and freight, and customs duty of AED 10,000 (an assumed figure; actual duty depends on the tariff code). This is a hypothetical example, not a quote.
| Step | Amount (AED) |
|---|---|
| Customs value including insurance and freight | 200,000 |
| Customs duty (assumed) | 10,000 |
| Excise tax | 0 |
| VAT base | 210,000 |
| Import VAT at 5% | 10,500 |
Customs duty depends on the goods' tariff classification; confirm the rate with the customs authority where the goods clear.
Who pays import VAT at customs, and when?
A VAT-registered importer accounts for the import VAT in its VAT return, while an unregistered importer pays at the border before release. The difference comes from Articles 48 and 50 of the Executive Regulation (Cabinet Decision No. 52 of 2017, as amended).
| VAT-registered importer | Unregistered importer | |
|---|---|---|
| How VAT is settled | Reverse charge: declared in your VAT return | Paid to the FTA before customs releases the goods |
| Cash at the border | Normally none for the VAT | Full import VAT |
| Conditions | Registered at import; details to let the FTA verify the import; own customs registration number given to the FTA; cooperation with FTA import rules | None |
| Using an agent | Not needed for VAT | A VAT-registered agent can pay for you; the agent can't recover that VAT |
| Fallback | If a condition fails, pay at the border | Not applicable |
According to the UAE government's importer guidance published at VAT's launch, registered importers declare import VAT in the return for the period of import, due by the 28th of the following month. Check your own filing period and deadline on EmaraTax, because your filing period decides your deadline.
Since 1 January 2026, under Federal Decree-Law No. 16 of 2025, a business applying the reverse charge no longer has to issue a self-invoice, though it must keep supporting documents (Ministry of Finance announcement).
How do I pay import VAT at customs step by step?
Lodge the customs declaration with the customs authority of the emirate where the goods arrive, then settle the VAT either at the border or in your return, depending on your registration status. Portals differ by emirate, so treat these steps as the sequence, not a screen-by-screen guide.
- Confirm who is named as importer on the declaration, and that it's the entity that will use and be able to recover the goods' VAT.
- If you're VAT-registered, check that your tax registration number (TRN) is active and that your customs registration number is on file with the FTA.
- Lodge the declaration through the customs authority's system, usually via a clearing agent.
- Unregistered importers: pay the import VAT to the FTA before release, directly or through a VAT-registered agent. Registered importers meeting the conditions: no border payment of the VAT.
- Keep the supplier invoice, the customs statement showing the goods' details and value, and any agent's statement.
- Report the import VAT in your VAT return for the period of import on EmaraTax, and claim the matching input tax where you're entitled to it.
If you'd rather not track these dates by hand, the free UAE compliance calendar lists them for your company.
Do imports into a free zone or designated zone carry VAT?
Goods brought into a qualifying designated zone from outside the UAE aren't treated as imported into the UAE, so import VAT doesn't arise on entry. A designated zone is an area that meets the Executive Regulation's conditions and is treated as outside the UAE for VAT purposes (Federal Decree-Law No. 8 of 2017, Article 50).
Not every free zone is a designated zone. The FTA publishes the list of designated zones, so check whether your specific zone is on it before assuming no VAT, and confirm how goods leaving the zone for the mainland are treated with your adviser.
Other imports aren't taxed either. Goods under a customs duty suspension (such as temporary admission or customs warehousing) and goods covered by a customs duty exemption (such as returned goods or certain personal effects) don't attract import VAT, subject to guarantees the FTA may require (Executive Regulation, Article 47).
Can I recover the VAT I paid on imports?
Yes: import VAT is input tax, and you can recover it in the first VAT period in which you meet the conditions, which include having the invoices and import documents (Article 55 of the VAT law). The goods must be used for taxable supplies; with a mix of taxable and exempt supplies, only a share is recoverable.
Three points to check:
- Import VAT paid on goods whose final destination is another GCC implementing state isn't recoverable in the UAE (Article 54(4)).
- Import VAT paid on goods imported before your registration can be recovered in some cases once you register (Article 56(1)(b)).
- The FTA can reject input tax where it's linked to tax evasion in the supply chain and you knew or should have known (Article 54 BIS).
5%: the standard UAE VAT rate applied to the customs value of imported goods plus insurance, freight, customs duty and excise tax. Source: Federal Decree-Law No. 8 of 2017, Articles 3 and 35, checked 11 November 2026.
What most guides don't tell you
Your customs declaration names the importer, and that name decides who recovers the VAT. If a forwarder or a group company is on the declaration, the VAT is theirs to account for. Recovering it in your own return needs a clean paper trail between you and that entity, so agree the arrangement in writing before the first shipment.
Imports count towards VAT registration. The mandatory threshold of AED 375,000 is measured on taxable supplies and imports (UAE government VAT registration page, checked 11 November 2026). A company that sells little but imports stock heavily can cross it without noticing, and import VAT paid before registration isn't automatically lost, but it's only recoverable in the cases the law allows.
The reverse charge isn't a right; it's conditional. Customs has to see your TRN and customs registration number. If the numbers on the declaration don't match your registration records, you may not satisfy the conditions and could be asked to pay at the border, which ties up cash.
Old guidance on guarantees and forms is out of date. Payment channels have changed since 2018, so confirm the current process on EmaraTax and with your clearing agent.
Which deadlines apply to your company?
Import VAT sits inside your wider VAT calendar: return dates, corporate tax filings, licence renewals and visa deadlines all interact. The free UAE compliance calendar shows your company's UAE tax and compliance deadlines, personalised from a few questions, as a PDF and calendar file.
Frequently asked questions
How does the reverse charge mechanism work in the UAE? A registered business treats an import as a supply to itself: it calculates the VAT at 5% and reports it in its VAT return, and can usually claim the matching input tax in the same return. It applies to imported goods and imported services, and since 1 January 2026 no self-invoice is required.
What is a designated zone for VAT? A designated zone is an area that meets conditions in the Executive Regulation and is treated as outside the UAE for VAT purposes. Goods can move into and between designated zones without VAT, but not every free zone qualifies.
Can I recover VAT on business expenses and imports? Yes, where the spend relates to taxable supplies and you hold valid documents; for imports those are the import documents and supplier invoice. Mixed taxable and exempt activity means only a share is recoverable.
What input VAT can't I recover? VAT linked to exempt supplies or non-business use generally can't be recovered, nor can VAT paid on goods bound for another GCC state under Article 54(4), or VAT tied to evasion in the supply chain. Speak to a tax adviser on borderline items.
About Qawi · Qawi is a corporate services firm licensed in the Sharjah Media City (SHAMS) free zone, handling company formation, visas and PRO, bookkeeping, VAT and corporate tax for UAE businesses. Guides are researched from FTA, Ministry of Finance and free zone sources. Qawi on LinkedIn
Sources
- Federal Decree-Law No. 8 of 2017 on Value Added Tax (UAE Legislation portal)
- Executive Regulation of Federal Decree-Law No. 8 of 2017, Cabinet Decision No. 52 of 2017 (Ministry of Finance)
- Ministry of Finance: VAT law amendments starting January 2026 (Federal Decree-Law No. 16 of 2025)
- UAE Government: Register for VAT
- UAE Government: VAT guidance for importers (published at VAT launch)
Last checked: 11 November 2026
This is general information, not tax or legal advice for your specific situation.