A UAE VAT-registered supplier sells goods to a customer outside the GCC implementing states and arranges for the goods to physically leave the UAE 60 days after the date of supply, retaining both the customs export document and the airway bill as evidence. Under UAE VAT Law, how is this export of goods treated?
- Zero-rated, because the goods left the UAE within the 90-day limit and both official and commercial evidence of export were retained
- Standard-rated at 5%, because zero-rating for exports under UAE VAT Law applies only to services, not to goods
- Exempt from VAT entirely, meaning the supplier cannot recover any input tax related to the export
- Zero-rated regardless of the 90-day limit, since export documentation was eventually obtained
Why A? And why not the others?
Correct answer: A. Zero-rated, because the goods left the UAE within the 90-day limit and both official and commercial evidence of export were retained
UAE VAT Law zero-rates the export of goods to a destination outside the UAE and outside the GCC implementing states, provided the goods physically leave the UAE within 90 days of the date of supply and the supplier retains official evidence (the customs export document) and commercial evidence (such as an airway bill or bill of lading) of the export. Here both conditions are met, so the supply is zero-rated. Option B is wrong because zero-rating for exports applies to goods as well as services; the rules simply differ in their specific conditions. Option C is wrong because zero-rated supplies remain taxable supplies (taxed at 0%), letting the supplier recover related input tax, unlike an exempt supply. Option D is wrong because the 90-day departure window is a substantive condition, not a formality; missing it means the supply is taxed at the standard 5% rate even if export paperwork is later obtained.
Source: UAE Federal Decree-Law No. 8 of 2017, Article 45 and its Executive Regulation (zero-rating of exports of goods)