The import or export of any type of goods has an international tax levied on them when it crosses the borders. The custom duties are the tax, imposed on goods traded between one country and another.
These taxes are levied on most products, although some are exempted from the list. Each country has its regulations and laws which clearing agents abide by, and import and export businesses must take into account when transacting with other businesses for their requirements.
Some of the salient factors of the import and export trade in Dubai and the UAE have been discussed for a clearer understanding; businesses must take into consideration all the discussed factors when dealing with their product category.
How is it calculated?
In the UAE, the customs duties are calculated on the insurance, the cost of the items, and freight value at a five percent rate. The CIF value is generally assessed based on commercial invoices, including the cost of the shipment; however, it is prudent to note that the customs duty is not likely to be always calculated on this invoice, as oftentimes, it is calculated on the value of the goods. Duty on alcohol is set at steep 50 percent and tobacco sales take it a notch above and are set at 100 percent. There are also various categories of products that are exempted from customs duties. These figure high on the list for businesses s it impact the profitability of its operation over time.
What is the value-added tax?
In the UAE, the value-added tax is imposed on most imported products, which is mostly paid for by consumers. Businesses charge their customer VAT and collect for the government, which is set and the rate of five percent. Businesses trading in larger volumes are likely to pay higher VAT than lower volume businesses.
The excise tax is placed on various unhealthy items, such as tobacco and alcohol, to discourage people from indulging in unfavorable practices that are detrimental to their health. A few examples of excise tax levied in products such as carbonated drinks set at 50%, 100% tax on energy drinks, electronic smoking devices, the liquid used in the electronic smoking devices, and tobacco, lastly, there is a 50% tax levied on sugared products or products with artificial sweeteners.
The next most important factor is finding a reliable and dependable local firm, which can assist the business with the customs duties, amongst other essential components of the business. Local firms with agents work closely with shipping companies in UAE to ensure a smooth passage from the imported and exported products.
Freight forwarders work alongside businesses, as they are licensed to work as custom clearance agents, and forwarding of good when necessary. Freight forwarders typically undertake other chores as such warehousing, storage during transition, consolidation, packing, documentation, measurements, and weight of the cargo, and container lease, insurance, and foreign exchange transactions. These agents know their way around the local laws and the right contacts for the easy and smooth operations of the importing and exporting business, for their customers.
Freight forwarders ensure competitive pricing for each shipment and can also act as an advisor for the business. Export strategies, new markets, competitive scenarios are only a few of the factors they may advise businesses about.
It is, therefore, essential to appoint a customs house agent to ensure smooth completion of all formalities for the imported or exported goods; however, larger enterprises and businesses often have dedicated staff to clear customs smoothly without hassle.
In UAE, the top imports are for gold, broadcasting equipment, and jewelry; it also imports various types of machinery, food, transport equipment, and chemicals. The bottom line is that custom clearing agents are crucial for the supply chain industry and is a niche in the industry that requires professional experience and knowledge for impeccable execution.
As each country has its custom duties and regulations, businesses must get customs clearance in Dubai before selling the good in the local markets. UAE offers various lucrative options for business owners, and also due to its strategic location, and businesses thrive and prosper, with favorable conditions and optimal operations.