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Exports under UAE VAT Law

The UAE is the largest exporting State among all the GCC States. The major products exported from UAE are electronics, precious metals and stones. It is the 29th largest export economy in the world and the 20th largest importer in the world. Hence, exports and are integral to traders in UAE. In this article, let us briefly understand exports and how they are treated under VAT in UAE.

Are exports taxable ?

Exports are considered as taxable supplies. However, they are zero rated, i.e. tax at 0% is applicable on exports. Additionally, the treatment of exports is based on certain scenarios. These scenarios can be divided 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
We cover the following topics regarding UAE VAT Registration
Can input tax be recovered on exports ?

As exports are taxable supplies, input tax can be recovered on supplies used to make exports. If the exporter makes domestic supplies also, the input tax recovered can be used to reduce their tax liability. If the exporter is dealing solely in exports, the exporter can get refund of the tax paid on inputs.

Are records of exports required to be maintained ?

Yes, records of exports made are required to be maintained for minimum 5 years from the end of the year to which the invoices pertain.

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