Dubai reduces threshold for imposing customs duties on imports of consignments

EY
EY Global

Ernst & Young Global Ltd.

12 Jan 2023
Subject Tax Alerts
Categories Indirect Tax
Jurisdictions United Arab Emirates

  • Dubai Customs will impose customs duties on consignments imported to Dubai with a value exceeding AED300 starting 1 January 2023 under Customs Notice 05/2022.

  • This threshold was formerly set at SAR1,000, i.e., approximately AED970.

Executive summary

On 1 January 2023, Dubai Customs started implementing Customs Notice 05/2022 (pdf) issued on 22 June 2022. This Customs Notice lowers the threshold of consignment value of shipped goods to AED300 for the customs duty exemption when importing consignments to Dubai.

Detailed discussion

Customers in Dubai are required to pay customs duties on orders from abroad when the value exceeds AED300 per shipment. The threshold was formerly set at SAR1,000 (approximately AED970) as per the GCC Unified Guide for Customs Procedure (pdf) and has now been lowered as of 1 January 2023.

The new rule applies to parcels or shipments up to 70kg that are transported via courier companies. Consignments of cards, mail, visually impaired leaflets, and print materials are out of scope of this Customs Notice and remain not subject to customs duties.

It should be noted that this new rule also does not apply to tobacco, tobacco products, e-cigarettes, nicotine liquid, alcoholic beverages and foods containing alcohol. These goods are not subject to any threshold and therefore, are subject to customs duties regardless of their value when imported to Dubai.

Implications

The threshold of consignment value being lowered triggers increased costs for courier companies as they will now be required to pay customs duties at the border for such consignments, which amount they should subsequently collect from the customers in Dubai. Courier companies should review the compliance obligations this amendment triggers, along with the costs incurred when collecting such duties from customers and the risk of non-collection.

 

For additional information with respect to this Alert, please contact the following:

EY Consulting LLC, Dubai
  • Pascal Cange, MENA Global Trade leader
  • Sandra Isabet, Indirect Tax
  • Sayed M Muneeb, Global Trade
  • Thais O Cunha, Global Trade
EY LLP (United States), Middle East Tax Desk, New York
  • Asmaa Ali

For a full listing of contacts and email addresses, please click on the Tax News Update: Global Edition (GTNU) version of this Alert.

EY refers to the global organization, and may refer to one or more, of the member firms of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients.