Complete Guide to UAE Transfer Pricing Documentation
August 10, 2026
Import Tax in UAE: Customs Duty Rates, VAT on Imports & How It Works
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Importing goods into the UAE costs more than the price you pay your supplier. Most shipments face a 5% customs duty and a 5% import VAT, calculated one on top of the other so a 100,000 AED shipment can add over 10,000 AED in tax before customs releases it.
Understanding UAE import charges, customs duty and VAT on imported goods can help businesses estimate their landed costs and avoid unexpected tax liabilities. Checking them well before shipment helps importers budget more accurately. This guide breaks down how UAE customs duty and import VAT are calculated, what changes if you’re importing through a free zone instead of the mainland, and how to get your import license in place.
What Is UAE Import Tax?
UAE import tax is a broad term. It is not one single tax. It means the duties and taxes that may be payable when goods enter the UAE. For importers, the two main parts are customs duty and import VAT.
Customs duty is a fee charged under the customs tariff. It is usually based on the customs value of the goods. That value includes the cost of the goods, insurance, and freight. Import VAT is a different tax. It applies to imported goods when those goods would be subject to VAT if sold inside the UAE. So imported goods are treated like local supplies for VAT. The tax is collected when the goods are imported.
A business importing commercial goods may face:
Customs duty
Import VAT
Excise tax, where applicable
Customs clearance charges
Shipping and insurance costs
Port handling and other fees
The real amount depends on the goods, their customs classification, customs value, origin, exemptions and the facts of the import. So importers should calculate the full landed cost before shipping goods to the UAE. Do not look only at the supplier invoice price.
Choosing Between Free Zone and Mainland for Import Business in UAE
Choosing between a free zone and a mainland setup depends on where you want to sell, how you import, and whether you need direct access to the UAE market.
Mainland Setup
A mainland trade licence from the DED lets you import goods, trade within the UAE, and trade internationally. You must register with customs in the relevant emirate. Goods brought into the mainland may attract customs duty and import VAT. This setup suits businesses that want to sell directly in the local market, open retail shops, supply local clients, or work with government entities.
Free Zone Setup
A free zone trade licence suits businesses focused on international trade and reexports. Goods kept inside the free zone generally have no import or export duty. But free zone companies cannot trade directly in the UAE mainland without a distributor or the proper customs process. If goods move from the free zone into the mainland, customs duty and import VAT can apply. This setup suits traders, logistics firms, and holding companies that mainly serve markets outside the UAE.
Which One Suits You?
Choose the mainland if your main goal is to import and sell inside the UAE. Choose a free zone if your main goal is to import, store, reexport, or trade internationally with limited mainland activity. The right choice depends on your customers, your goods, and your long term plan.
Free Zone vs Mainland Import Requirements in the UAE
When deciding between a UAE free zone and a mainland company, think about where you will sell, how you will import and store your goods, and whether your business needs direct access to the UAE mainland market.
Import requirement | Free Zone route | Mainland route |
Licence and customs registration | Get a free zone trade licence. Register with the relevant customs authority. | Get a mainland trade licence. Register with the relevant customs authority. |
Import declaration | Consign goods to the free zone. File the entry declaration. Goods can usually stay in the zone under duty-suspended rules, subject to conditions. | File the import declaration through the relevant emirate’s customs system. |
Required documents | Commercial invoice, packing list with HS codes, bill of lading or airway bill, certificate of origin, and any product permits. | Commercial invoice, packing list with HS codes, certificate of origin, bill of lading or airway bill, and any product permits. |
Customs duty and import VAT | Goods kept inside the free zone are generally not subject to mainland import duty. If goods move into the mainland, customs duty and import VAT may apply. | Customs duty and import VAT are generally payable when goods enter the mainland. |
Selling in the UAE mainland | You need a local import declaration and customs procedures when goods move from the free zone into the mainland. | You can import directly into the mainland, subject to customs and regulatory rules. |
VAT treatment | VAT treatment depends on the free zone type and how goods move. Designated Zone rules may apply. | Import VAT is usually paid or accounted for under the applicable customs or VAT procedure. VAT-registered businesses may recover it as input tax if rules are met. |
May apply to specific goods, depending on the product and transaction. | May apply to specific goods, depending on the product and transaction. |
Dubai Import Tax Rates
1. Customs Duty Dubai: Generally 5%
The standard customs duty rate in the UAE is generally 5% of the customs value for most imported goods. However, the applicable rate can vary depending on the product and its HS code. Certain goods may be exempt or subject to higher rates, including rates of 50% or 100%.
2. Import VAT: 5%
The standard UAE VAT rate is 5%. Import VAT is calculated on the import value, including the customs value, applicable customs duty and any excise tax payable on the import.
3. Excise Tax: Up to 100% or Product-Specific Rates
Excise tax applies only to specified excise goods. Tobacco products, energy drinks, electronic smoking devices and accessories, and liquids used in electronic smoking devices are generally subject to a 100% excise tax rate. Sweetened drinks are subject to a separate tiered volumetric calculation.
Example of Import Tax in Dubai Calculation
For goods with a customs value of AED 100,000:
Tax | Rate | Amount |
Customs Duty Rate | 5% | AED 5,000 |
Import VAT Rate | 5% of AED 105,000 | AED 5,250 |
Total | AED 10,250 |
This example assumes the goods are subject to the standard 5% customs duty and 5% VAT, with no excise tax or other applicable charges.
Import VAT in the UAE: 5% Rate and VAT Recovery
Import VAT is generally 5%. VAT-registered businesses may be able to recover the import VAT as input tax, provided the goods are used for taxable business activities and the applicable VAT recovery requirements are met. This means import VAT may be recoverable rather than a final cost for an eligible VAT-registered business. For more information, see our guide to VAT on Export Products in the UAE
Steps to Obtain an Import Business Licence in Dubai
To import goods into Dubai, you must get a trade licence that allows import activities. Follow these steps:
Decide on your jurisdiction: Pick between a mainland setup or a free zone setup in Dubai based on where you will sell or store your imported goods.
Choose your business activities: Clearly state the goods you plan to import. This decides the type of licence you need.
Reserve your trade name : Get a unique business name that meets Dubai and UAE naming rules.
Submit your documents : Common documents are shareholder passport copies, proof of address, and a business plan if the authority asks for one.
Get initial approval: The authorities in Dubai check your application before they issue the trade licence.
Register with customs: Get a customs code from Dubai Customs so you can clear imported goods.
Open a corporate bank account: A dedicated business account is necessary for import payments and customs transactions.
Key Compliance Considerations for Dubai Import Tax
After you get your licence, you must follow local rules to keep your import operations running smoothly.
Customs Duty on Imports in Dubai
Dubai import tax includes customs duty. Customs duties generally apply when goods enter the Dubai mainland market, while goods kept in free zones for re-export may receive different customs treatment, subject to applicable rules.
VAT on Imports
Dubai import tax also includes import VAT. The standard UAE VAT rate is 5%, and import VAT generally applies to goods that would be subject to VAT if sold in the UAE. Eligible VAT-registered businesses may be able to recover import VAT as input tax.
Approvals for Restricted Goods
Other regulated products that may need special approvals from the relevant UAE or Dubai authorities include, but are not limited to certain medicines, telecommunications equipment and food products.
Import Records and Documentation
Businesses bringing goods in Dubai must keep a record of commercial invoices, box lists, forwarder documents, bills of entry for customs clearance and other memos required to meet the necessary conditions for tax compliance.
Dubai Trade Licence Renewal
All businesses involved in import and trading activities must have a legal trade licence, which they must renew as per the process of the licensing authority responsible for issuing said licences to entities in Dubai.
Import Tax and Customs Advisory Services from Tulpar Global Taxation
As Tulpar Global Taxation, we assist businesses importing goods into the UAE with customs duty and import VAT treatment, documentation, compliance requirements and tax recovery. We go over import records, explain applicable tax obligations and help comply with customs and VAT when setting up an import business in Dubai or the rest of the UAE. This leaves businesses with the scope of focusing on growth while we help them remain compliant to the UAE VAT regulations. For expert assistance regarding UAE import tax, customs duty, import VAT and excise tax registration, compliance, filing or advisory matters email us at info@tulpartax.com call +971 54 444 5124.
FAQs:
What is UAE import tax?
UAE import tax includes customs duty and import VAT. Customs duty is usually 5% of the customs value. Import VAT is 5% on the value plus duty. Excise tax may also apply to specific goods.
What is the customs duty rate in the UAE?
The general customs duty rate is 5% of the customs value. Some goods have higher rates, like alcohol at 50% or tobacco at 100%. Free trade agreements may reduce or remove duty.
How is VAT calculated on imports in the UAE?
Import VAT is 5% of the customs value plus customs duty and any excise tax. For example, AED 100,000 value plus AED 5,000 duty means VAT on AED 105,000.
Can I recover import VAT in the UAE?
Yes, VAT-registered businesses can recover import VAT as input tax if goods are used for taxable activities. Non-registered businesses and private importers bear the VAT as a final cost.
What is the difference between free zones and the mainland for imports?
Mainland imports directly enter the UAE market and attract customs duty and import VAT. Free zone goods stay duty-suspended unless moved into the mainland, then duty and VAT apply.
