When can a UAE customer treat export as "Indirect export"?

Let's start by explaining what is "Indirect export."

It is an Export of Goods to a destination outside of the Implementing States, where the overseas customer is responsible for arranging the collection of the Goods from the supplier in the State and who exports the Goods himself, or has appointed an agent to do so on his behalf.

This supply is subject to the "Zero rates.”

The main difference between direct and indirect export of goods is that of the person responsible for carrying on the transportation of goods, i.e., if the supplier is responsible, the supply shall be treated as direct exports

whereas, if the customer is responsible for carrying on transportation, it shall be treated as indirect exports.

When can a UAE customer treat export as "Indirect export"?

The following conditions shall meet:

  1. The Goods are physically exported to a place outside the Implementing States or are put into a customs suspension regime following GCC Common Customs Law, within 90 days of the date of the supply under an arrangement agreed by the supplier and the Overseas Customer at or before the date of supply.
  2. The Overseas Customer obtains official and commercial evidence of Export or customs suspension following GCC Common Customs Law and provides the supplier with a copy of this.
  3. The Goods are not used or altered in the time between supply and Export or customs suspension, except to the extent necessary to prepare the Goods for Export or customs suspension.
  4. The Goods do not leave the State in possession of a passenger or crew member of an aircraft or ship.

What are the documents to be maintained for treating an export as “Indirect Export”?

The following documents are required:

  1. Official evidence, which is the export document(ED) issued by the Customs department
  2. Commercial evidence, which shall include Airwaybill, Bill of lading, Consignment note, or Certificate of shipment

All the above documents should identify the:

  1. The supplier
  2. The consignor
  3. The Goods
  4. The value
  5. The Export destination
  6. The mode of transport and route of the export movement

The exporting entity shall have its name mentioned in the commercial evidence to prove that the transaction is “Indirect export” transaction of the concerned entity. If the entity’s name is not mentioned on any of the documents mentioned above, then it cannot be treated as “indirect exports.”

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