Sign up for tax alert emails    GTNU homepage    Tax newsroom    Email document    Print document    Download document

January 12, 2023
2023-5038

Dubai reduces threshold for imposing customs duties on imports of consignments

  • 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 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 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

EY LLP (United States), Middle East Tax Desk, New York

 
 

The information contained herein is general in nature and is not intended, and should not be construed, as legal, accounting or tax advice or opinion provided by Ernst & Young LLP to the reader. The reader also is cautioned that this material may not be applicable to, or suitable for, the reader's specific circumstances or needs, and may require consideration of non-tax and other tax factors if any action is to be contemplated. The reader should contact his or her Ernst & Young LLP or other tax professional prior to taking any action based upon this information. Ernst & Young LLP assumes no obligation to inform the reader of any changes in tax laws or other factors that could affect the information contained herein.

 

Copyright © 2024, Ernst & Young LLP.

 

All rights reserved. No part of this document may be reproduced, retransmitted or otherwise redistributed in any form or by any means, electronic or mechanical, including by photocopying, facsimile transmission, recording, rekeying, or using any information storage and retrieval system, without written permission from Ernst & Young LLP.

 

Any U.S. tax advice contained herein was not intended or written to be used, and cannot be used, by the recipient for the purpose of avoiding penalties that may be imposed under the Internal Revenue Code or applicable state or local tax law provisions.

 

"EY" refers to the global organisation, 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.

 

Privacy  |  Cookies  |  BCR  |  Legal  |  Global Code of Conduct