Is international transport of goods zero-rated?
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Yes. Transporting goods between the UAE and abroad (in either direction) is charged VAT at 0%, and related services like insurance or handling during that journey are also zero-rated.
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The detail
Under Article 33(1) of the Executive Regulation, international transport of goods is zero-rated where goods move from a place in the UAE to a place outside it, or vice versa. This is reinforced by the GCC Common VAT Agreement, which zero-rates intra-GCC and international goods transport. Related services such as goods for use on the transport, ancillary services during transport, and insurance/arranging of transport are also zero-rated under Article 33(2).12
What the law says
- Article 33(1)(a)-(b) of the Executive Regulation zero-rates transporting goods from the UAE to outside it, or from outside the UAE to inside it.1
- Article 32 of the GCC Common VAT Agreement zero-rates intra-GCC and international goods transport and related services.2
- Article 33(2) extends the zero rate to goods supplied for use on the transport and to services supplied to the recipient during that transport, including insurance and arranging services.1
What it depends on
- A purely domestic leg of goods transport is only zero-rated if it is supplied by the same taxable person who supplies the international leg, per Article 33(1)(d).1
- If the domestic leg is subcontracted, the zero rate still applies only if the original supplier remains contractually liable to the client for the entire (domestic and international) transport, per FTA guidance on the 2024 amendment.3 Based on FTA guidance
- If a client separately contracts a different supplier just for the domestic leg, that domestic leg does not qualify for zero-rating.3 Based on FTA guidance
Check before you rely on it
- Confirm whether the transport crosses the UAE border or is purely domestic.
- If part of the journey is domestic, check who is contractually responsible for the whole transport service.
- Check that any subcontracting arrangement keeps the original supplier liable for both legs.
Sources (3) — read the official text
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Article 33 – Zero-rating International Transportation Services
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Article 33 – Zero-rating International Transportation Services for Passengers and Goods 20 1. The supply of international transportation Services for passengers and Goods and Transport-related Services shall be subject to the zero rate in the following cases: a. Transporting passengers or Goods from a place in the State to a place outside the State. b. Transporting passengers or Goods from a place outside the State to a place in the State. c. Transporting passengers from a place in the State to another place in the State by sea or air or land as part of a supply of an international transport of those passengers if either or both the first place of departure, or the final place of destination, is outside the State. d. Transporting Goods from a place in the State to another place in the State if the Services are supplied by the same supplier as part of the supply of Services of transporting these Goods either from a place in the State to a place outside the State or from a place outside the State to a place in the State. 2. The following Goods and Services shall be zero-rated if they are supplied in respect of the transportation Services of passengers or Goods to which Clause 1 of this Article applies: a. The Goods which are supplied for use or consumption or sale by or on an aircraft or a ship. b. The Services supplied to the recipient of transportation services during the supply of transportation services. c. The Service of insuring, or the arranging of the insurance, or the arranging of the transport of passengers or Goods. 3. A supply of a postage stamp issued by Emirates Post Group Company shall be zerorated where the postage stamp may only be used or redeemed for transportation of Goods to a place outside the State.
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Article (32)
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Article (32) Intra-GCC and International Transportation The following transportation transactions shall be subject to Tax at zero-rate: 1. Goods and passenger transport from one Member State to another and the supply of transport-related Services; 2. International Goods and passenger transport from and to the GCC Territory and the supply of transport-related Services.
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Read the article
.الالئحة التنفيذية Regulation are met. Zero-rating international transportation services – تطبيق نسبة الصفر على خدمات النقل الدولي للركاب )33( والسلع – المادة Article 33 Article 33(1)(d) of the Executive Regulation was ) من33( ) من المادة1( تمّ تعديل الفقرة (د) من البند amended to clarify that the domestic transportation الالئحة التنفيذية لتوضيح أن النقل المحلي للسلع كجزء من of goods as part of an international transport service خدمة نقل دولي قد يخضع لنسبة الصفر فقط إذا تمّ توريد may only be zero-rated if the service is supplied by .الخدمة من قبل ذات المورد الذي يقدّم خدمة النقل الدولي the same supplier that provides the international transport service. For example, if a taxable person transports goods إذا قام خاضع للضريبة بنقل سلع من،على سبيل المثال from Dubai to Mumbai via Abu Dhabi, the domestic فإن الشق المحلي من،دبي إلى مومباي عبر أبوظبي leg between Dubai and Abu Dhabi would only qualify عملية النقل بين دبي وأبو ظبي يكون مؤهالً لنسبة الصفر for zero-rating under Article 33(1)(d) of the Executive ) من33( ) من المادة1( بموجب الفقرة (د) من البند Regulation if both the domestic leg (Dubai to Abu الالئحة التنفيذية فقط إذا تم توريد كل من الشق المحلي Dhabi) and the international leg (Abu Dhabi to (من دبي إلى أبو ظبي) والشق الدولي (من أبو ظبي إلى Mumbai) is supplied by the same taxable person. .مومباي) من عملية النقل من قبل ذات الخاضع للضريبة The same tax treatment would apply if the supplier تنطبق ذات المعاملة الضريبية إذا تعاقد المورد من الباطن subcontracts a part of the transport service but على جزء من خدمة النقل ولكنه ظل مسؤوالً من الناحية remains contractually liable to the client for both the التعاقدية تجاه العميل عن النقل المحلي والدولي للسلع على domestic and international transport of the goods. .حدٍ سواء In the above example, if the taxable person إذا تعاقد الخاضع للضريبة من الباطن،في المثال أعاله subcontracts the domestic leg of transportation to على الشق المحلي من عملية النقل لنقل السلع من دبي إلى transport the goods from Dubai to Abu Dhabi, the ، يجوز للمورد تطبيق نسبة الصفر على التوريد،أبوظبي supplier may zero-rate the supply, provided the ، من الناحية التعاقدية،ًالمورد مسؤوال شريطة أن يظل ّ supplier contractually remains liable for the entire عن خدمة النقل بالكامل وأن يتم استيفاء جميع المتطلبات transportation service and all the other relevant .األخرى ذات الصلة لتطبيق نسبة الصفر requirements for zero-rating are met. However, if the client enters into an agreement with إذا أبرم العميل اتفاقية مع مورّ د لنقل السلع فقط،مع ذلك a supplier to only transport the goods from Dubai to مع االستعانة بناقل آخر للقيام،من دبي إلى ميناء أبوظبي 19/37
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Written by AI from the FTA sources above and checked before display. Not tax advice or official FTA information - confirm with a tax adviser before you act. Full disclaimer
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