custom duties consulting services in the gcc

CUSTOMS DUTIES
IN UAE &
THE GCC

CUSTOMS DUTIES
IN DUBAI, ABU
DHABI & THE UAE

Our Customs Duties service in Dubai, Abu Dhabi and the UAE is part of our tax consultancy services in Dubai, Abu Dhabi and the UAE.

Custom Duty is a tariff or a tax paid to the government imposed on good transported, imported or exported, across international borders. In general, the purpose of the custom duty is to protect the country’s economy, support local merchandise, provide form of protection to the country’s jobs, and control the transport of restricted and prohibited products by regulating the flow of goods into and outside the country.

The custom duty is either specific or on ad valorem basis, it is a rate or a percentile determined by the total value of the goods paid for in another country; its value is not based on factors such as quality, size or weight of the good.

In general, each country imposes its own type of custom duties, and these are:

Basic Customs Duty (BCD).
Countervailing Duty (CVD).
Additional Customs Duty or Special CVD.
Protective Duty.
Anti-dumping Duty.

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WHAT IS THE DIFFERENCE BETWEEN TAX AND CUSTOMS DUTY?

A tax is placed on all types of goods sold or services provided in the country, both imported or exported, and taxation is considered a source of income generation for governments. On the other hand, a duty is a type of tax yet imposed only on goods being imported into the country, and its main purpose is to protect economies upon different aspects. Both taxes and duties are charged to the importer on his shipments that must be paid to the relevant authorities and adds on to the overall landed cost to be paid for a good imported to the country.

WHAT IS THE DIFFERENCE BETWEEN A TAX AND A CUSTOMS DUTY?

A duty is imposed to all goods being imported (except to exempted items), and it may vary depending on the nature of the good. A tariff is however, an additional fee charged on selected goods imported to the country generally in aim to discourage the import of those goods to protect local economies and jobs. Imported goods are classified using the HS and HTS code to determine the applied duty and tariff levied on the shipment.

Follow this link that contains the unified custom duty for GCC states on all goods.

WHAT IS IMPORT DUTY RECOVERY?

Importers of goods into the country are eligible for refund when they can demonstrate and prove that the amount they paid is in excess of the required duty, this is known as import duty recovery.

WHAT IS DUTY DRAWBACK?

Duty drawback is a form of import duty recovery, where the paid duty is refunded on goods that is only transiting through a country and are being re-exported out of the country. The business will need to provide certain proof documents for exit of goods.

WHAT IS A COUNTERVAILING DUTY?

Countervailing duties are special duties and tariffs granted by the International Trade Commission on special cases, where governments may provide aid and assistance to certain countries’ domestic industries to enable them to export their products for lower prices.

WHAT ARE ANTI-DUMPING DUTIES?

Anti-dumping duties are special duties charged to protect local industries from the imported foreign goods that may be sold in the domestic market at a lower value than the fair market price. The duty is used to eliminate the cost of dumping, and is determined by calculating the difference between the cost of production or price of the good in the country of origin and the price of the good sold in the local importing country.

FACTORS TO DETERMINE SUBJECTIVITY TO CUSTOM DUTY IN UAE

The United Arab Emirates levies custom duties on commercial goods based on the following factors:

Whether the business is registered onshore or in a free zone.
Nature of the goods being transported.
Source and destination of the goods being moved.
Trade agreements between the UAE and exporting country.
Other laws and regulations.

WHAT IS THE CUSTOM DUTY RATE IN THE UAE?

The custom duty rate is 5% of the value of the good plus cost, freight, and insurance (“CIF”) value which includes the cost of transport until arrival of the goods to port of destination. However, the duty may vary on some goods such as 50% on alcohol and 100% on tobacco products.

All commerce businesses are required to register with customs, to declare the value of the imported goods along with the supported invoice and certificate of origin, and obtain clearance for the movement of goods in and out of the country through submitting a customs declaration form under the following regimes; import, export, transit, transfer, or temporary admission. Fees vary based on the custom declaration type and shipping channel.

Businesses will be provided a Client Customs Code from the customs authority at the emirates at which the business is based in. The client customs code will be valid in accordance with the license expiry date and can be renewed annually. The code acts as an approval for the business to either import or export, which facilitates goods transportation and shipment and prevention from potential legal risks and fines.

Businesses can also request to obtain a warehouse license to store goods under the supervision of the Customs Department for a specified period without paying customs duty, by paying a cash or bank guarantee of AED 25,000 – AED 150,000 depending on the type of the warehouse chosen, private or public and providing the required documents including audited reports and ownership certificate.

REFUND OF DEPOSIT

In cases of export of goods, a deposit equal to the custom duty is imposed on the goods. The customer may submit a refund of deposit or release of guarantee paid in lieu of customs duty upon provision of a proof document that the goods were re-exported; including the following documents: exit/entry certificate, copy of export declaration, copy of manifest, copy of airway bill or copy of lading, based on the mean of transport.

EXEMPTIONS FROM CUSTOM DUTIES

Personal and used items are considered duty-free and not subject to any custom duties.
Shipments exported from the country to any other country.
National factory shipments are considered duty free under the industrial exemption.
Imports of the diplomatic and military corporations and bodies.
Imports of charities.
Imports originated from GCC or Arab countries, subject to providing certificate of origin.
Imports originated from GCC countries are considered UAE local goods, subject to proof to a certain percentage that the raw material used in manufacturing the good is originated from in the GCC.
Shipments under the World Customs Organization Approved Coordinator.

PROHIBITED AND RESTRICTED GOODS

Prohibited and restricted goods are goods for import or export that are prohibited or restricted under the provisions of the Common Customs Law and may only be released subject to the approval of the competent authority.

PROHIBITED GOODS INCLUDE:

All types of narcotic drugs.
Gambling tools, machinery, and related products.
Nylon fishing nets.
Live swine.
Used, reconditioned, and inlaid tires.
Radiation and nuclear contaminating substances.
Goods that contradict Islamic faith and public morals.

RESTRICTED GOODS INCLUDE:

Live animals, plants, fertilisers, and insecticides.
Ammunitions, arms, explosives, and fireworks.
Banned medicine.
Printed material, publications, and media products.
Alcoholic beverages.
Rough diamonds.
Transmitters and radio products.
New tires.
E-cigarettes and electronic hookah.
Nuclear energy-related products.

CUSTOMS INSPECTION

There are two types of inspection carried out by customs’ officers to verify the documents against the shipment; internal inspection which is carried out by the customs’ officers at the port, and external inspection which is carried out at the warehouse or storage facility of the importer/exporter.

VIOLATIONS AND FINES

Violation	Penalty/Fine
Free zone non-re-export	10% of the CIF value
E-clearance penalty for late submission of documents	AED 50
Tariff fine for declaring an incorrect HS code	AED 500
Incorrect Declaration	AED 500

WHAT ARE THE RISKS RELATED TO CUSTOMS DUTIES SERVICES IN THE UAE?

Through careful planning and professional advice, the minimal risks connected to Taxes in the UAE can be reduced. You can handle the Tax legislations and procedures easily with the assistance of professional consultants, ensuring adherence to legislations and reducing potential risks.

For an expert consultation, contact Creation Business Consultants via email [email protected] or call +971 4 878 6240 today.

CUSTOMS DUTIES FAQs

WHAT DOCUMENTATION IS REQUIRED FOR IMPORTING GOODS INTO THE UAE?

To import goods into the UAE, businesses must submit several key documents, including a customs declaration form, commercial invoice, certificate of origin, and any necessary permits or certificates for restricted items. The specific documentation requirements can vary based on the nature of the goods and the regulations in place. For tailored advice on the required documentation and to ensure compliance with UAE customs regulations, contact us at [email protected].

HOW CAN BUSINESSES TRACK THEIR CUSTOMS DUTY PAYMENTS?

Businesses can track their customs duty payments through the customs authority’s online portal, which provides real-time updates and records of transactions. Additionally, working with a customs broker can help streamline the process. For detailed assistance with tracking your payments or resolving any discrepancies, please reach out to us at [email protected] for expert guidance.

ARE THERE ANY SPECIFIC REQUIREMENTS FOR RE-EXPORTING GOODS FROM THE UAE?

When re-exporting goods from the UAE, businesses need to provide documentation such as export declarations, exit certificates, and other relevant proofs to qualify for refunds or duty drawbacks on the re-exported goods. The process ensures that the customs duties previously paid are refunded if the goods are returned or re-exported. For detailed help with the re-exporting process and to ensure compliance with all requirements, contact [email protected].

WHAT STEPS SHOULD BE TAKEN IF CUSTOMS DUTIES ARE NOT PAID ON TIME?

If customs duties are not paid on time, businesses may face fines, penalties, and potential delays in clearing goods. It’s important to address any late payments as soon as possible by contacting the customs authority and settling the overdue amounts. For assistance with managing late payments and avoiding additional penalties, get in touch with us at [email protected].

CAN CUSTOMS DUTIES BE NEGOTIATED OR REDUCED FOR BULK IMPORTS?

Customs duties are generally set by regulations, but businesses may be able to explore trade agreements or exemptions that could reduce duties for bulk imports. It’s advisable to review any applicable trade agreements and consult with a customs expert to identify potential opportunities for duty reductions. For personalized advice on negotiating or reducing customs duties, contact [email protected].

WHAT ARE THE PENALTIES FOR IMPORTING PROHIBITED GOODS INTO THE UAE?

Importing prohibited goods into the UAE can result in severe penalties, including fines, confiscation of the goods, and possible legal action. The specific penalties depend on the nature of the prohibited items and the circumstances of the violation. To avoid these penalties and ensure compliance, consult with us at [email protected] for expert advice and assistance.

HOW DO FREE TRADE AGREEMENTS IMPACT CUSTOMS DUTIES IN THE UAE?

Free trade agreements (FTAs) can significantly impact customs duties by reducing or eliminating duties on certain goods imported from partner countries. These agreements are designed to promote trade by making it more cost-effective. To understand how specific FTAs affect your business and to explore any potential benefits, please contact us at [email protected] for a comprehensive review.

WHAT IS THE PROCESS FOR OBTAINING A CUSTOMS WAREHOUSE LICENSE?

Obtaining a customs warehouse license involves submitting an application to the customs authority, providing necessary documents, and paying a cash or bank guarantee. The license allows businesses to store goods without immediate payment of customs duties. The process also requires compliance with various regulations and documentation requirements. For detailed guidance on obtaining a customs warehouse license, contact us at [email protected].

HOW ARE CUSTOMS DUTIES ON ELECTRONIC GOODS DETERMINED IN THE UAE?

Customs duties on electronic goods in the UAE are generally calculated based on the Cost, Insurance, and Freight (CIF) value of the goods. Specific rates may apply depending on the product category and any relevant trade agreements. For accurate information on customs duties for electronic goods and to ensure compliance, reach out to us at [email protected].

WHAT SHOULD BUSINESSES DO IF THEY SUSPECT AN ERROR IN THEIR CUSTOMS DUTY ASSESSMENT?

If businesses suspect an error in their customs duty assessment, they should contact the customs authority to request a review of the assessment. Providing supporting documentation and evidence can help resolve any discrepancies. For assistance with correcting errors and ensuring accurate duty assessments, contact us at [email protected] for expert support.

CUSTOM DUTIES IN QATAR

The General Authority of Customs (“GAC”) is the regulatory authority in Qatar to monitor the import and export of goods in and out of the country.
Businesses are required to provide a custom declaration form to GAC upon arrival for clearance of imported goods. Business may use “Al-Naqeeb” online portal to finalise custom clearance procedures such as to check information related to tariffs, duty calculation, accessing customs data, complete a duty payment and a customs transaction.
The custom duty rate in Qatar is also set at a percentage value of goods which is 5%; however, the custom duty for urea and ammonia is 30%, steel is 20%, cigarettes and tobacco related products is 100%.

EXEMPTED GOODS FROM CUSTOM DUTY

Personal products and household items.
Imports for charity.
Imports of the diplomatic and military corporations and bodies.
Imported goods cleared for the free zones and duty-free shops.
Goods in transit at designated destinations.

Prohibited goods for import to the country include flammable goods, nuclear and radioactive materials, arms and explosives, narcotic drugs, and goods shipped from economically boycotted countries.
The Customs Department may run an inspection on the goods; usually by providing a prior notice to the shipment owner, and at his presence. Goods that are harmful or that are prohibited may be damaged or re-exported. Not that only, but also the business bears the cost of transportation to the examination place, packing and repacking, in case an examination is required.

EXEMPTED GOODS FROM CUSTOMS INSPECTION

Imported goods in the name of the ruling family.
Imported goods in the name of diplomatic and consular corporations, and the political mail.

CUSTOM DUTIES IN KUWAIT

Kuwait approved the custom duty regulation in 2003; setting the custom duty rate at 5% CIF on most goods, while tobacco products are levied at a rate of 100%. Some products such as foodstuff, medicines and medical items are exempted from the single customs tariff.

CUSTOM DUTIES IN OMAN

The Directorate General of Customs is the regulatory authority for customs control and security of imports and exports in Oman. A custom duty of 5% is generally levied on the majority of imported goods; however, the custom duty is 100% on alcohols, 50% on cement, 15% on paints and polyurethane products, to name few. While basic food commodities and goods manufactured within the GCC are exempted from the duty. The custom duty in Oman is also assessed on an ad valorem basis on the CIF value. Importing entities are required to provide a list of documents for clearance of the imported goods which include but not limited to the following: the original commercial invoice which should reflect an accurate description of the goods, bill of lading or airway bill, relevant certificate or permit for restricted imports and certificate of origin.

CUSTOM DUTIES IN BAHRAIN

In Bahrain, all goods are subject to custom duty at a rate of 5% of the value of the good including the CIF as per the unified customs tariff table unless exempted as per the GCC unified customs law or any other international agreement. While the custom duty is 225% for alcoholic beverages, 200% for cigarettes and 20% for paper and aluminium products.
Businesses looking to engage in import are required to electronically submit the customs/import declaration form to the customs department including all required documents such as bill of lading and invoice to issue an exit order and release of goods. Note, that goods are subject to inspection and examination as per the risk assessment standards criteria.

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