VAT Update

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VAT UAE

Importation of Goods by Agents on Behalf of VAT Registered Persons.

A new public clarification has been announced by the UAE Federal Tax Authority (VAT Public clarification – VATP012) referring to the importation of goods by agents on behalf of VAT registered persons. The following clarifications were announced:

  1. This is relevant where a VAT registered agent imports goods on behalf of the owner of the goods who is also VAT registered. In some circumstances, the importing agent will have their own TRN number at the time of import and the VAT amount would have been auto-populated.
  2. The clarification covers the adjustments which should be made in the VAT returns of the importing agent and the owner of goods.
  3. There are two ways in which this adjustment can be made:
    • The importing agent and owner both make an adjustment in Box 7 (Adjustments to goods imported into UAE). Importing agent makes a negative adjustment to nullify the amount of auto-populated Box 6 figure in the VAT return. Owner of the goods makes a positive adjustment in Box 7 to include the value of the goods imported on its behalf by the importing agent. And, the owner would be entitled to recover the import VAT (declared in Box 7) in Box 10 as per its normal VAT recovery position. Under this option, the importing agent and owner need to have written an agreement to make these adjustments and must retain this agreement along with customs documentation.
    • The importing agent issues a statement to the owner compliant with Article 50(7) of the UAE VAT executive regulations, which will be considered as a Tax invoice allowing the owner to recover Input tax in Box 9 (Standard rated expenses) of the VAT return

Information in this blog has been obtained by our professional Partner, Premier Brains Accounting & Auditing. – qualified finance professionals and business advisors. For more information on VAT in the UAE, contact Sovereign PPG on +971 (0)4 456 1761 or email SovPPG@SovereignGroup.com. Alternatively, you can me directly at info@sovereigngroup.com.

 

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