VAT on Exports
The UAE is among all GCC states the largest exporting state. electronics, precious metals, and stones are the products exported from UAE.
UAE’s top imports are gold, diamonds, jewellery and automobiles. Exports and imports therefore are an integral part of UAE traders.
Exports are considered supplies which are taxable. They are rated zero, however i.e. export tax is applicable at 0% is applicable. Additionally, export treatment is based on a number of scenarios. One can divide these scenarios as follows;
- Export of goods outside a GCC VAT implementing state
- Export of goods to unregistered recipients in a GCC VAT implementing state
- Export of goods to registered recipients in a GCC VAT implementing state
- Export of goods which require installation or assembly outside the state
Since the exports are taxable goods, the input tax on goods used to make exports can be recovered. Where the exporter also makes domestic supplies, the recovered input tax may be used to reduce their tax liability. If the exporter deals solely with exports, the exporter will be able to get refund of the tax paid on inputs.
Record of exports mad should be maintained for minimum 5 years from the end of the year to which the invoices pertain.