Dubai: Domestic Corporate Taxation
Imports into Dubai can only be undertaken by those importers who have the appropriate trade licence. Import duties have been largely standardised at 4%, but there are many exemptions, including food, building materials, medical products and any item destined for the three free zones: Jebel Ali Free Zone, Dubai Internet City and the Dubai International Financial Centre. Food products must carry dates of manufacture and expiry and meat for the local market must have a certificate to prove compliance with Islamic law.
Dubai (as part of the UAE) and under an agreement with the GCC (Gulf Cooperation Council) is required to levy 10% duty on all luxury goods.
By law 70 goods have been exempted from tariffs (at the time of writing), including medicines, agricultural machinery, pesticides, fertilizers, periodicals, wood, unstrung pearls, un-worked silver and gold, iron and steel for use in construction, and raw or partially worked materials for use by local manufacturers. Goods produced within the GCC are also exempt from duties as are goods destined for the Jebel Ali Free Zone.
Cigarettes are the exception to the general rule with the federal government approving a 100% tax. A 50% tax is levied on alcohol.
On January 1, 2003, the unified customs area of the Gulf Co-operation Council came into effect, covering Kuwait, Qatar, Oman, Saudi Arabia, Bahrain, and the United Arab Emirates (including Dubai).
In April 2005, the 15th Joint Council and Ministerial Meeting between the European Union and the six member states of the Gulf Cooperation Council in Bahrain took place, focusing on the state of the free trade agreement negotiations between the European Union and the Gulf Cooperation Council.
The two parties agreed that rapid progress was needed on a number of outstanding trade issues, particularly on services, industrial tariffs and public procurement, and noted the importance of a rapid conclusion of the negotiations on human rights, terrorism, weapons of mass destruction and migration issues.
A further round of talks on the matter took place in June 2005. The talks dragged on through 2011 without agreement. Despite the lack of an agreement, trade between the EU and GCC reached nearly EUR129 billion in 2011.
An appeals desk has been established at the federal customs directorate to hear claims from customs importers for goods to be classified as duty free. The Dubai port authority offers long-term storage at concessionary rates. Temporary imports are allowed with duty payable only on goods which remain in the UAE after six months.