Customs duty and import VAT accounting for UAE importers

You ask in plain English, the AI does the bookkeeping work, and you or your accountant approve the result.

• You ask: “Record the import declaration for shipment SH-2614 and show me the reverse charge for this quarter.”
• The AI agent: The AI reads the uploaded customs declaration, posts the duty to the shipment's landed-cost account, records the import VAT as both output and input VAT under the reverse charge, and lists the quarter's imports for the VAT 201 draft.
• You review: Your accountant checks the customs value and duty against the declaration, confirms the reverse charge entries and reviews the return before filing.

The UAE government portal notes that tariffs range from 0 to 5 per cent, with 5 per cent the standard rate in Dubai and Sharjah, applied to the CIF value. Some goods carry higher rates, and some, such as qualifying GCC-origin goods, are treated differently.

For VAT, Article 35 of the VAT law sets the value of imported goods as the customs value, including insurance, freight and customs fees, plus any excise tax paid. Under Article 48, a registered business importing goods for its business accounts for the tax itself through the reverse charge. Where input tax is fully recoverable, the output and input VAT cancel out on the return.

Attach the customs declaration to the shipment. Duty goes to a landed-cost clearing account or straight to stock. Import VAT is entered under the reverse charge treatment so it appears in the imports box of the VAT 201 draft and as recoverable input VAT.

• Customs declaration attached as evidence
• Duty recorded as cost of the goods
• Import VAT through the reverse charge, both sides
• Clearing agent invoices with their own VAT recorded separately

CIF value is AED 200,000. Duty at 5 per cent is AED 10,000. On the declaration's VAT value of AED 210,000, import VAT is AED 10,500. The importer is VAT-registered with full recovery, so the AI records AED 10,500 as output VAT under the reverse charge and AED 10,500 as input VAT. Net VAT effect: zero, but both appear on the return.

Stock is AED 210,000 plus clearing fees of AED 1,800, whose AED 90 VAT is ordinary input VAT. The figures are illustrative; confirm the value and rate on your own declarations. Importers who want customs reports grouped by HS code can ask for a custom report at hello@hellobooks.ai.