Frequently Asked Questions

1. What is VAT? How does it work? When does it come in effect?

The UAE Ministry of Finance (MoF) has announced the introduction of the Value Added Tax (VAT) across the country, effective January 1, 2018.

 

VAT is a form of indirect tax on the consumption or use of goods and services applied at the point of sale, and charged on applicable transactions.

 

A registered business collects the VAT charged to customers on supply of goods and services, and pays VAT on goods and services purchased from its suppliers. The difference between the VAT collected from customers and the VAT paid to suppliers is then remitted to the Federal Tax Authority (FTA).

2. What are the VAT rates?

VAT will be introduced across the UAE at a standard rate of 5%. Certain supplies of goods and services will be subject to a 0% VAT charge, while some are exempt (Refer Federal Decree-law No (8) of 2017) and the Executive Regulations for more details click here.

3. What products and services are covered under VAT?

VAT is a general consumption tax, and will apply to the majority of transactions of goods and services, unless specifically exempt by law. TNT will apply and collect VAT, where applicable on its services from January 1, 2018. Rates and charges on all existing TNT contracts are VAT exclusive.

4. Who needs to register for VAT?

A business must register for VAT if their taxable supplies and imports exceed the prescribed “mandatory registration threshold.” Additional information for businesses can be found at 

5. What are the VAT responsibilities of a business from January 1, 2018?

VAT-registered businesses generally:

  • must charge VAT on taxable goods or services they supply;
  • must issue a valid VAT invoice for the supply of goods and services. To be considered as a valid VAT invoice, the document must follow a specific format as mentioned in the legislation;
  • may reclaim any VAT they’ve paid on business-related goods or services; and
  • maintain business records which will allow the government to check that they are compliant.

6. Where can I share my Tax Registration details with TNT and where can I get additional details on VAT?

In order to share your Tax Registration details with TNT, please download the template available at tnt.com/ae/vat/, fill in the details, attach the completed template and send it to tnt.uae.vat@tnt.com along with the supporting documents.

7. What is the mandatory information that I need to provide as a customer?

In order for us to continue serving you following the implementation of VAT on January 1, 2018, the following tax registration details in the template provided by TNT are required:

  • TNT Account Number
  • Name of your company
  • Registered office address
  • Tax Registration Number
  • Copy of Tax Registration certificate (if available)

8. Why is the Tax Registration Number important?

The Tax Registration Number is important for 2 reasons:

  • To ensure VAT benefits, your Tax Registration Number needs to be listed on the Tax Invoice provided by TNT after January 1, 2018.
  • The Tax Registration Number will also help to facilitate the clearance of goods at the time of import and avoid delays in clearance.

9. Why does TNT require a copy of my tax registration certificate?

TNT requires a copy of the tax registration certificate to verify the information provided, and avoid any administrative errors in invoicing.

10. I already sent my tax registration details to the person I deal with at TNT. Why do I have to submit them again?

The details you previously provided need to be updated in the TNT template and should be emailed to tnt.uae.vat@tnt.com along with a copy of the Tax registration certificate (if available), to ensure they are entered into our systems correctly.

11. If incorrect information is submitted, what is the correction process?

If you have submitted incorrect information, you can re-submit the correct details along with the supporting documents to tnt.uae.vat@tnt.com.

12. I have applied for Tax registration with the FTA but am waiting for my Tax Registration Number. Will I be able to update it once I receive it?

Yes. You can submit your Tax Registration Number with the supporting documents to tnt.uae.vat@tnt.com when you receive them.

13. How can I get TNT’s Tax Registration Details?

Name of the entity: TNT (UAE) (L.L.C.)

Registered Address: Business Avenue Building 4th Floor, Port Saeed, Deira, PO Box 15321, UAE

Tax Registration Number: 100009354000003

For a copy of TNT Tax Registration certificate please contact your TNT Territory Manager or write to tnt.uae.vat@tnt.com 

14. Do I need to sign new contracts with TNT effective January 1, 2018?

No. Additional contracts will not be needed. Rates and charges on all existing TNT contracts are VAT exclusive. TNT will apply and collect VAT, where applicable on its services from January 1, 2018.

15. I am a customer located outside the UAE, do I need to pay VAT on goods imported in the UAE?

Yes, VAT applies on goods imported in the UAE (subject to certain exemptions) irrespective of where you are located. VAT charges on goods imported are primarily the liability of the importer or consignee. Depending on the arrangement between you and the importer or consignee, you may be liable to pay the applicable VAT charges in the UAE.

16. I am a customer outside the UAE, can I claim credit of the VAT paid in UAE on import of goods in the UAE?

You can claim credit on VAT paid in the UAE only if you are registered with the FTA with a Tax Registration Number.

17. I am located in a Free Zone; will VAT apply on goods imported in a Free Zone in the UAE?

The FTA is expected to release a decision listing which Free Zones are specifically defined under the law as “Designated Zones.” VAT will not apply to goods imported into the Designated Zone from outside the UAE.

18. What happens if I do not pay VAT on the import of goods?

If you do not pay VAT on import of goods, the goods are not likely to be released by Customs Authorities. There could also be penalties for non-compliance as per the VAT regulations.

19. Who do I contact if I have any questions?

In case of any additional questions please contact your TNT Territory Manager or write to tnt.uae.vat@tnt.com.

20. Do you have more VAT questions?

Helpful links for information on VAT:

Common VAT Agreement of the States of the Gulf Co-operation Council:

  • Federal Law by Decree No.13 of 2016 Concerning the establishment of the Federal Tax Authority:
  • The landmark Federal Tax Law No. (7) of 2017 for Tax Procedures:
  • Federal Law No. (8) of 2017 on VAT:
  • Cabinet Decision No. (52) of 2017 on the Executive Regulations of the Federal Decree-Law No (8) of 2017 on Value Added Tax: