Importation of goods by agents on behalf of VAT registered persons
Issue
Importation of goods from outside the UAE into the UAE mainland is subject to VAT. When a VAT registered person imports goods, he may, subject to certain conditions, account for VAT in the tax return (“VAT return”), rather than at the time of importation of the goods. However, when a person not registered for tax imports goods, VAT needs to be paid before the goods are released to the person.
There will be situations where a VAT registered owner of the goods may request another VAT registered person (“importing agent”) to import goods on behalf of the former. This will happen when the person importing the goods is, for example, an agent of the owner of the goods, or in some cases, the customer of the owner of the goods.
In the above situations, as the VAT registered importing agent would have provided their TRN at the time of importation of the goods, the VAT amount would be automatically pre-populated in Box 6 of the VAT Return of the importing agent.
This Public Clarification discusses the adjustments that should be made in the VAT returns of the importing agent on one hand and the owner of the goods on the other hand. The Public Clarification also discusses who can recover the import VAT.
Summary
The VAT registered importing agent who acts as the importer of record would be required to make a negative adjustment in Box 7 of the VAT Return, in order to nullify the amount prepopulated in Box 6 of the VAT Return. At the same time, the VAT registered owner of the goods would be required to make a positive adjustment in Box 7 of the VAT Return to include the value of goods imported on its behalf by the importing agent.
The owner of the goods would be entitled to recover the import VAT as per its normal VAT recovery position.
VATP012 – Importation of goods by agents Download the complete