VAT on Imports and Exports in UAE

Why Does VAT on Imports and Exports Need Special Review?

In local transactions, the link between the invoice, VAT amount, and VAT return is often clearer. In import and export transactions, there may be several parties involved, such as the foreign supplier, shipping company, customs broker, customs authority, payment platform, and overseas customer.

As a result, the error may appear in different places: the commercial invoice value, import declaration, freight and insurance value, import VAT, export evidence, or the way the transaction is reported in the VAT return.

A proper review helps the company understand whether imports were recorded correctly, whether exports are supported by sufficient documents, and whether overseas transactions were properly classified in the VAT return.

VAT on Imports

Importing goods into the UAE requires careful review because customs records may not appear in the same way as invoices recorded in the accounting software. The value of goods in the import declaration may also differ from the supplier invoice because of freight, insurance, customs fees, or currency differences.

A VAT-registered company should confirm that import VAT was linked to the correct TRN, that import records were reflected properly in the VAT return, and that input tax related to imports was treated correctly.

Where the importer is not registered for VAT, the payment and treatment of import VAT may differ depending on the case and the applicable customs and tax procedures.

VAT on Exports and Zero-Rated Supplies

Exports of goods and some services supplied outside the UAE may be subject to VAT at the zero rate. However, this does not mean that every invoice to an overseas customer is automatically zero-rated without sufficient supporting documents.

For export of goods, the company usually needs documents proving that the goods left the UAE, such as shipping documents, customs export declarations, bills of lading, or other documents showing the movement of goods.

For export of services, the nature of the service, the customer’s location, the place of use and enjoyment, and any special conditions should be reviewed before deciding the VAT treatment.

Documents We Review for Imports and Exports

• Foreign supplier invoices and sales invoices to overseas customers.
• Import declarations issued through customs.
• Shipping documents, bills of lading, delivery orders, and transport documents.
• Export documents and proof that goods left the UAE.
• Customs reports linked to the company’s TRN.
• Bank statements and transfers related to imports or exports.
• Sales contracts, purchase orders, or commercial agreements.
• Credit notes or discounts related to overseas transactions.
• Sales and purchase schedules by tax period.
• Previous VAT returns and their matching with customs records and invoices.
• Documents from shipping companies and customs brokers.
• Documents supporting services supplied to customers outside the UAE.

Common VAT Errors in Imports and Exports

• Import records not matching the VAT return.
• Import declarations not linked to the correct TRN.
• Recording the foreign supplier invoice without reviewing customs records.
• Claiming input tax on imports without sufficient supporting documents.
• Treating an overseas sale as zero-rated without adequate evidence.
• Not retaining shipping documents or proof that goods left the UAE.
• Confusing export of goods with export of services.
• Reporting overseas sales in the wrong VAT return box.
• Not reviewing the effect of returns and discounts on export transactions.
• Shipping and customs broker records not matching accounting invoices.
• Import VAT recorded twice or not recorded at all.
• Ignoring currency differences between invoices, customs records, and accounting entries.

How Do We Link Customs Records to the VAT Return?

The practical review starts by comparing import and customs records with purchase records and VAT ledgers. Then, differences are identified between the goods value, VAT amount, currency, related expenses, and the tax period in which the transaction was recorded.

For exports, the sales invoice is linked to shipping documents, export evidence, or proof of service supplied outside the UAE. Then we confirm that the transaction appears in the correct box of the VAT return.

This link is very important because the FTA may not only ask about the VAT return figure. It may request the document that supports why the transaction was treated as an import, export, zero-rated supply, or outside-scope transaction.

Who Needs This Service?

• Companies importing goods from outside the UAE.
• Companies exporting goods to customers outside the UAE.
• General trading, import, and distribution companies.
• E-commerce companies buying or selling across borders.
• Companies dealing with customs brokers and shipping companies.
• Companies with differences between customs data and accounting records.
• Companies applying zero-rating to exports without an organized document file.
• Companies that received a document request or tax review notice from the FTA.

How Can Al Basma Help with VAT on Imports and Exports?

Al Basma reviews import and export transactions and matches supplier and customer invoices with customs documents, shipping records, accounting records, and VAT returns.

We also help companies prepare a clear supporting document file linking the import or export transaction to the original invoice, accounting entry, payment, customs documents, shipping documents, or service evidence.

We provide practical recommendations to deal with differences, improve accounting software recording, and organize VAT documents related to international trade.

Services Related to Imports, Exports, and VAT

Why Is VAT Import and Export Review Important?

• Match customs data with accounting records and VAT returns.
• Support zero-rated supplies with sufficient export documents.
• Reduce import VAT and input tax errors.
• Understand differences between invoice value, customs value, and payment value.
• Improve the company’s readiness for document requests or tax reviews.
• Organize international trade records within accounting and VAT files.

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