VAT consultants in UAE
According to the regulations of VAT in the UAE, the exports of goods are treated as zero-rated. Some people consider the VAT treatment as a straightforward scenario. Some business owners do not understand that the export of goods will be zero-rated only when it meets certain requirements and conditions as per UAE VAT law.
It is crucial for businesses to understand when the export goods can be considered zero-rated. It is reliable for you to concern with VAT consultants in UAE to understand VAT treatment for export goods. Continue reading for deeper insights on the VAT treatment of exports of goods from the UAE.
When Can You Treat The Export Of Goods As Zero-Rated?
According to Article 45 of the Federal Decree-Law No. 8 of 2017 on VAT, any indirect or direct export of goods from the UAE or other GCC implementing states outside the states will be treated as zero-rated. This comes in the zero-rate if complying with the specified conditions in the executive regulations in the UAAE VAT Law. You can also consult with the VAT consultants in Dubai to discuss this in detail.
What Are Direct And Indirect Exports?
Direct exports refer to goods and services that are sold directly by a company in the UAE to a buyer in a foreign country. For example, if a company in the UAE exports oil to a buyer in China, it is a direct export.
Indirect exports, on the other hand, refer to goods and services that are exported from the UAE through an intermediary. This intermediary may be a trading company, a broker or an agent who purchases goods from companies in the UAE and then sells them to buyers in foreign countries. For example, if a trading company in the UAE purchases electronics from a manufacturer in the UAE and then sells them to a buyer in Europe, it is an indirect export.
In general, direct exports offer higher profit margins for companies as they eliminate the need for intermediaries and allow companies to establish a direct relationship with their customers in foreign markets. However, indirect exports can be useful for companies that lack the resources or expertise to sell directly to foreign markets.
Conditions For Zero-Rating A Direct Export?
The direct export will be subject to zero rates if the following conditions are met:
- The goods must be moved to a location outside the implementing states or put into a customs suspension regime as per the Common Customs Law within 90 days of the date of the supply.
- The exporter must retain commercial and official evidence of customs suspension or export suspension.
VAT consultants in UAE
What Are The Conditions For Zero-Rating An Indirect Export?
An indirect export will be subject to zero rates if these conditions are met:
- The goods must be physically exported to a destination outside the states. The goods must be physically exported or placed under a customs suspension regime according to the Common Customs Law, within 90 days of the date of the supply under an arrangement agreed upon by the supplier and the Overseas Customer before or at the supply date.
- The overseas customer needs to get commercial or official evidence of customs suspension or export suspension in line with GCC Common Customs Law and provide the supplier with a copy.
- The goods should not be modified or used during the period of supply and custom or export suspension except to the extent crucial to prepare the goods for export suspension.
- The goods should not leave the UAE in the possession of a crew member or passenger of a ship or an aircraft.
ebs is one of the best accounting and bookkeeping firms in UAE helping many businesses to grow. ebs is also handling VAT for the clients and making sure nothing goes non-compliant. If you are looking for the best VAT consultants, then don’t go anywhere else. We can help you understand all the zero-rating export of goods from the UAE. However, if the business is unaware of the zero-rating exports of goods can wrongly determine the tax treatment of your exports. It is better to trust a well-reputed company for your exports of goods and ebs is a fully trusted firm in UAE to help you.
We also offer services such as accounting and bookkeeping services, VAT services, Auditing, Due Diligence audit services, and many more.
If you have any other queries about accounting services or require any other services, then feel free to contact us. Our experts will get back to you immediately and will offer you a free consultation.