Dubai reinstates former import value threshold of consignments

Executive summary

Based on a recent article published in the Khaleej Times dated 3 March 2023, the Dubai Customs announced by email that effective 1 March 2023, it suspended the application of the threshold in place since 1 January 2023 and will reinstate the Gulf Cooperation Council (GCC)-wide threshold of consignment value of shipped goods to SAR1,000 for customs duty exemption when importing consignments into Dubai.

Detailed discussion

Background

The GCC Unified Guide for Customs Procedure (pdf) had set the threshold at SAR1,000 for payment of customs duties on orders from abroad. Dubai Customs lowered this threshold to AED300 effective 1 January 2023 pursuant to Customs Notice 05/2022 (pdf). However, as per the news, the application of the relevant provision of Customs Notice 05/2022 relating to exemption of consignments has been suspended, and the threshold in accordance with the GCC Unified Guide for Customs Procedure was reinstated effective 1 March 2023. As noted, this suspension was announced via an email issued by Dubai Customs.

There has not been any legislative update yet on legally reinstating the former threshold.

Application of the threshold

This rule applies to parcels or shipments transported via courier companies. It should be noted that this exemption 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 are therefore, subject to customs duties regardless of their value when imported to Dubai.

Implications

The increase in the threshold of consignment value triggers lower costs for courier companies that pay customs duties at the border for such consignments, which amount they should subsequently collect from customers in Dubai. Courier companies should review the compliance obligations coming under the purview of the reinstatement of the initial threshold value fixed by the GCC Unified Guide for Customs Procedure.

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 Services

• Sayed M Muneeb, Global Trade

• Thais O Cunha, Global Trade

• Cevat Delibay, 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.