Payment of VAT on Imports by Unregistered Persons or Taxable Person without Custom Registration
As per the UAE VAT Law Article 48(1), Import of concern goods or services to be treated as supply for importer and he shall be responsible for Tax obligation and Accounting of Due Tax resulting no physical payment of VAT at the time of import.
But If a person who is not registered for Tax in the UAE or who doesn’t hold a Custom Code in his name, imports concern goods in the UAE has to pay VAT (physically) before the release of goods from customs. Article 48(1) of the UAE VAT Law (Input/ Output adjustment in Tax Return) will not be applicable on such imports.
- The Agent who is clearing the goods from customs is liable for payment of Tax.
- Agent shall pay due Tax on such imports as part of their Tax Returns.
- ITC will not be available for agent of such payment of Tax made on behalf of other persons.
- Agent shall issue a statement containing its Name, Address, TRN, Date of Statement, Date of Import, Description of imported goods and the amount of Tax paid.
Simplified Version of Relevant Article of Executive Regulations
1. Where the Concerned Goods are imported by a Person not registered for Tax or where the Taxable Person does not meet the conditions in Clause (1) of Article (48) of the ER, Tax shall be paid to the Authority by or on behalf of the Person before the release of the Goods.
2. A Tax Registered agent who acts on behalf of the Person for the purposes of importing the Goods shall be responsible for the payment of the Tax in respect of the Import of Goods.
3. The obligation on the agent to pay Tax on behalf of another Person shall be met as part of the agent’s Tax Return and pay Tax as though he imported the goods himself.
4. An agent shall not recover as Input Tax of any such Tax paid on behalf of another Person.
5. Where an agent has paid Tax on behalf of another Person is accordance with this Article, it shall issue a statement to that other Person which contains, at the minimum, all of the following details:
- The name, address, and Tax Registration Number of the agent.
- The date of statement, Date of Import of the relevant Goods.
- A description of the imported Goods.
- The amount of Tax paid by the agent to the Authority in respect of the imported Goods.
Such statement shall be treated as a Tax Invoice for the purposes of the documentation requirements.
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