Import Procedures

The importer submits the Import Declaration application for UAE Customs clearance online through dubaitrade.ae. In case of restricted goods or duty-exempted cargo, the importer arranges for the necessary permits from the designated permit issuing authority before filling out the Customs Import Declaration.
For import of goods from outside the country into UAE the following original documents are required:

• Commercial invoice from the exporter addressed to a licensed importer in the country detailing total quantity, goods description and total value for each item (in triplicate);
• Certificate of origin approved by the Chamber of Commerce in the country of origin detailing the origin of goods; 
• Detailed packing list as per weight, method of packing and HS code for each individual article contained in the shipment;
• Import permit from the competent agencies in the event of importing restricted goods or duty- exempted goods;
• Original bill of loading;
• A form or letter of exemption from customs duties in cases where exemption requirements are fulfilled, including a Local Purchase Order (LPO).

For more information on the UAE Customs, please visit the website of the Federal Customs Authority.

Specific Import Procedures

Certain goods such as animals, medicines and weapons can be imported/exported only after receiving necessary permits from the competent authorities.
All imported meats - beef and poultry products - require a health certificate issued by the country of export and a "halal" slaughter certificate issued by an approved Islamic centre in that country. Some products require a sanitary or phytosanitary certificate or, for processed products, an export certificate confirming fitness for human consumption; and others a non-irradiation certificate for certain products (optional for European products).

Distribution channels

The UAE remains one of the most attractive market in the region for retailers, behind Saudi Arabia. UAE retail market was valued at USD 22 billion in 2020 (+14.4% compared to 2019), with grocery sales making up 44.2% of retail sales, at USD 9.7 billion (USDA). The sector is growing due to various factors such as rising per capita income, growing tourism industry, increasing expatriate population. According to Majid Al Futtaim, consumer spending increased by 14% in Q1 2022 compared to the same period in 2019, as the economy continued to recover from the Covid-19 pandemic.

The country remains very attractive to retailers as 87.5% of the population lives in urban centres (Data Reportal, 2022). UAE has a high penetration of supermarkets and hypermarkets due to high rate of urbanization. When it comes to modern grocer retailing, omnichannel (online and offline purchase) is becoming a growing trend. The UAE is the most advanced eCommerce market in the Middle East and North Africa (MENA) region and the sector is booming. Over 95% of purchases are predicted to be made online by 2040. Retail e-commerce is projected to grow 60% to more than USD 8 billion by 2025 from 2021 (EZDubai and Euromonitor). Online retail spending tripled in the Q1 2022 compared with the first three months of 2019, led by the food and beverage
and hypermarket/supermarket sectors (Majid Al Futtaim).


A number of selling methods are possible in the Emirates; direct sales are not very widespread. The most common way is to market products through local commercial agents. Many firms will choose a different distributor or commercial agent in each emirate. Imports and exports of food products have typically been entrusted to companies specialising in this field. However, the Government has recently abolished the monopoly of agents, and has proceeded to open up this sector. Finally, companies tend to make use of the geographic position of Dubai as a regional hub for stocking their goods before re-exporting them to other markets, e.g. India or Iran. Moreover, the use of franchising is rapidly expanding.

Distribution market players

Supermarkets have the largest market share of sales in UAE. These are followed by wholesale sales, shopping malls, trade fairs and exhibitions and, lastly, specialist shops. Major retail groups in the UAE include: Carrefour, Lulu Group, Union Co-operative Society, Abu Dhabi Cooperative Society and Sharjah Cooperative Society (USDA).

Retail Sector Organisations

Dubai Chamber of Commerce and Industry

Consumption Taxes

Nature of the Tax

VAT (value-added tax)

Tax Rate

5%

Reduced Tax Rate

Zero-rated items include exports of goods and services to outside the GCC, international transportation, and related supplies, supplies of certain sea, air and land means of transportation (such as aircrafts and ships), certain investment grade precious metals (e.g. gold, silver, of 99% purity), newly constructed residential properties supplied for the first time within three years of their construction, supply of certain education services, and supply of relevant goods and services, supply of certain healthcare services, and supply of relevant goods and services.

Other Consumption Taxes

Excise duties were introduced in 2017 for three types of products: carbonated beverages and products with added sugar or other sweeteners (50%), tobacco and electronic smoking devices and tools (100%), energy drinks (100%).
Most Emirates have hotel levies, which are charged on hotel room rental, services, and entertainment, administered differently in each Emirate. In Dubai, guests and hotel apartment tenants pay a Tourism Dirham fee ranging from AED 7 to AED 20 per room per night based on the hotel's star classification. In Abu Dhabi, hotels charge a tourism fee of 6% of the room rental and a destination fee of AED 15 per night. Dubai hotels also apply a 7% municipality fee on sales, while Abu Dhabi imposes a 4% municipality fee. Additionally, all Emirates charge a 10% service charge on hotel sale revenue.

Corporate Taxes

Company Tax

• 0% on taxable income not exceeding AED 375,000
• 9% on taxable income exceeding AED 375,000

Tax Rate For Foreign Companies

A company is deemed to have a permanent establishment in the country if it has a branch, a place of management or another fixed place of business, or an agent that has and habitually exercises authority to conclude contracts on behalf of the foreign company.

Capital Gains Taxation

Capital gains are taxed at the corporate income tax rate, but gains from the sale of a participation are exempt if the participation exemption applies. Gains or losses from asset or liability transfers between group members, or from mergers and demergers, may also be exempt if certain conditions are met.
The participation exemption is applicable to income from participating interests of at least 5%, provided specific criteria are met: (i) a holding period of at least 12 months, (ii) meeting a subject-to-tax test at a minimum rate of 9%, (iii) entitlement to receive at least 5% of profit distributions and liquidation proceeds, and (iv) meeting an asset test ensuring no more than 50% of the participation's assets consist of non-qualifying ownership interests. Additionally, the subject-to-tax test is satisfied if the participation qualifies as a holding company or if underlying participations meet the conditions, or if it pertains to certain entities under corporate income tax law. This exemption covers dividends, profit distributions, gains or losses on disposal of the participation, and foreign exchange and impairment gains or losses, except for losses from liquidation. If the participation was acquired through a non-qualifying exchange or transfer, the exemption is suspended for two years.

Main Allowable Deductions and Tax Credits

Deductions are determined based on accounting principles and the tax decrees of the various Emirates. Expenditures that are not of a capital nature and are incurred wholly and exclusively for the purposes of the business are generally deductible.
Companies can deduct up to 50% of the expenses incurred for entertaining customers, shareholders, suppliers, and other business partners, including costs for meals, accommodation, transportation, admission fees, entertainment facilities, and equipment, as well as any other expenses specified by a Cabinet decision.
The deduction of net interest expenses is limited to 30% of tax-adjusted EBITDA. However, this exemption does not apply if the net interest expense for the relevant tax period remains below the AED 12 million threshold. If the threshold is surpassed, the taxpayer can deduct the higher of either the threshold or 30% of EBITDA.

Non-deductible expenses include fines, penalties (excluding compensation for breach of contract), bribes or illicit payments, donations made to entities that are not Qualifying Public Benefit Entities, dividends/profit distribution, CT, recoverable VAT, taxes imposed outside the UAE, and any other expenses specified in a Cabinet decision.

A business is permitted to offset tax losses against the taxable income of future tax periods when computing the taxable income for that period. However, during any tax period, the set-off amount cannot exceed 75% of the taxable income for that specific period. Any remaining tax losses can be carried forward indefinitely to subsequent tax years.

Other Corporate Taxes

Most Emirates impose a municipality tax on properties, often based on the annual rental value, typically paid by tenants. In some cases, separate fees are charged to both tenants and property owners. For instance, in Dubai, the municipality tax on properties is currently 2.5% for commercial properties (paid by owners) and 5% for residential properties (paid by tenants). Additionally, a registration fee, such as the 4% land registration fee in Dubai based on the property's fair market value, may be imposed on property ownership transfers. This fee can also apply to the transfer of shares in entities owning real estate. Each Emirate administers these levies differently.Most Emirates impose a municipality tax on properties, often based on the annual rental value, typically paid by tenants. In some cases, separate fees are charged to both tenants and property owners. For instance, in Dubai, the municipality tax on properties is currently 2.5% for commercial properties (paid by owners) and 5% for residential properties (paid by tenants). Additionally, a registration fee, such as the 4% land registration fee in Dubai based on the property's fair market value, may be imposed on property ownership transfers. This fee can also apply to the transfer of shares in entities owning real estate. Each Emirate administers these levies differently.

The United Arab Emirates has a social security regime applicable solely to qualifying UAE and other GCC national employees, exempting non-GCC nationals. For UAE nationals (excluding Abu Dhabi), contributions are 20% of gross remuneration, with 5% paid by the employee, 12.5% by the employer, and an additional 2.5% from the government. In Abu Dhabi, the rate is 26%, with the employer contributing 15%, the government 6%, and the employee 5%. Contributions are capped between AED 1,000 and AED 50,000. Free Zone employees are also subject to social security obligations. Other GCC nationals follow the social security regulations of their home countries.

Most Emirates have hotel levies, which are charged on hotel room rental, services, and entertainment, administered differently in each Emirate. In Dubai, guests and hotel apartment tenants pay a Tourism Dirham fee ranging from AED 7 to AED 20 per room per night based on the hotel's star classification. In Abu Dhabi, hotels charge a tourism fee of 6% of the room rental and a destination fee of AED 15 per night. Dubai hotels also apply a 7% municipality fee on sales, while Abu Dhabi imposes a 4% municipality fee. Additionally, all Emirates charge a 10% service charge on hotel sale revenue.

Other Domestic Resources

UAE Federal Tax Authority

Double Taxation Treaties

Countries With Whom a Double Taxation Treaty Have Been Signed

Double-taxation agreements

Withholding Taxes

No withholding tax is levied by the federal government of the UAE.