Since the introduction of Value Added Tax (VAT) in the United Arab Emirates (UAE) on January 1, 2018, businesses involved in cross-border trade have had to comply not only with traditional customs regulations but also with complex VAT rules. Import VAT, in particular, applies to most goods entering the UAE mainland, and the failure to properly calculate, declare, or reclaim VAT can result in significant disputes with customs authorities or the Federal Tax Authority (FTA). This leads to a frequently asked question: Can lawyers in Dubai assist with customs-related VAT disputes in the UAE?
The answer is yes—and their role is often essential. Lawyers in Dubai provide strategic, legal, and procedural expertise to help businesses resolve customs-related VAT issues efficiently and lawfully.
Understanding VAT in the Context of Customs
VAT in the UAE is governed by:
- Federal Decree-Law No. 8 of 2017 on VAT
- Cabinet Decision No. 52 of 2017 on the Executive Regulations of the VAT Law
- Federal Tax Authority guidelines and public clarifications
When goods are imported into the UAE:
- 5% VAT is applied on the customs-declared value, which includes the cost of goods, insurance, freight (CIF), and any applicable customs duty.
- The importer is typically responsible for declaring and paying import VAT at the time of customs clearance—unless specific VAT payment deferral arrangements apply.
Disputes often arise due to:
- Incorrect VAT calculations based on valuation or HS code errors
- Delays or rejections in VAT refunds for imported goods
- Conflicts between declared values for customs and VAT purposes
- Classification issues that affect VAT exemptions or zero-rating eligibility
- Administrative penalties for failure to submit or pay import VAT on time
Common Customs-Related VAT Disputes
Here are several examples of scenarios where VAT and customs issues intersect, triggering legal disputes:
- Discrepancy in declared value: Customs may challenge the value used for VAT purposes, alleging undervaluation.
- Incorrect input tax credit claims: The FTA may reject VAT reclaims on goods imported without valid documentation.
- VAT on re-exported goods: Businesses may seek VAT refunds on goods re-exported from free zones or customs warehouses but face delays or denials.
- Double taxation risks: Especially when goods are moved between free zones and the mainland or transshipped through multiple jurisdictions.
- Unjustified penalties: Customs or the FTA may impose fines for non-compliance, often due to system errors or procedural misunderstandings.
How Lawyers in Dubai Assist with Customs-Related VAT Disputes
Lawyers in Dubai combine their expertise in customs regulations, tax law, and administrative litigation to provide end-to-end support for resolving VAT disputes linked to import and export transactions.
1. Legal Analysis and VAT Risk Assessment
The first step in resolving a dispute is understanding its root cause. Lawyers:
- Review customs declarations and commercial invoices
- Analyze discrepancies between customs and FTA systems (e.g., e-Dirham, e-services portals)
- Evaluate whether the correct import value and VAT amounts were declared
- Identify if procedural errors occurred during documentation, payment, or filing
This analysis enables businesses to understand whether the issue stems from a technical mistake, misinterpretation of the law, or a potential violation.
2. Representation Before the Federal Tax Authority (FTA)
If the dispute involves VAT rejections, incorrect assessments, or penalties:
- Lawyers file formal reconsideration requests to the FTA, providing legal arguments and supporting evidence.
- Draft detailed letters of explanation, clarifying transaction history and tax treatment
- Respond to FTA queries or audits relating to import VAT claims.
- Seek settlements or penalty waivers where possible, especially for first-time or unintentional offenses.
They help ensure the business presents a compliant and credible position to the tax authority.
3. Engaging with Customs Authorities on Dual Disputes
Many VAT issues are intertwined with customs processes, such as:
- Misclassification of goods (HS codes)
- Inaccurate customs valuation
- Disputes over whether goods are subject to VAT exemptions or zero-rated
Lawyers in Dubai liaise with both Dubai Customs, Abu Dhabi Customs, and FTA to align customs declarations and VAT assessments. They can:
- Submit revised declarations and supporting documentation
- File appeals against customs valuation used for VAT calculations
- Argue for revised duty and VAT liabilities using WCO and UAE legal frameworks
Their knowledge of both tax and customs systems gives clients an integrated legal advantage.
4. Assisting with VAT Refund Claims for Imports
Businesses that import goods for manufacturing, resale, or re-export may be entitled to reclaim input VAT. However, FTA audits and documentation requirements are strict. Lawyers:
- Ensure refund claims meet all legal and evidentiary requirement
- Review tax invoices, proof of payment, customs clearance records, and export documents
- Assist with FTA portal submissions and system registrations
- Address delayed or rejected refund cases through formal appeals or legal proceedings
This helps recover valuable tax credits and improves compliance for future claims.
5. Litigation and Tax Dispute Resolution
If administrative appeals fail, Lawyers in Dubai represent clients in formal tax dispute resolution processes, including:
- Filing cases with the Tax Disputes Resolution Committee (TDRC)
- Escalating matters to the UAE Federal Primary and Appeals Courts
- Arguing legal grounds for cancellation of penalties, reclassification of goods, or correction of taxable amounts
- Challenging the FTA’s interpretation of VAT law using local and international tax principles
They prepare comprehensive legal files, expert opinions, and precedents to strengthen the case.
6. Preventive VAT and Customs Compliance Support
Beyond disputes, lawyers also help companies avoid problems by:
- Designing tax-compliant supply chains
- Ensuring the correct VAT treatment for imported and exported goods
- Advising on VAT deferment schemes for registered importers
- Coordinating with customs brokers to verify declaration accuracy
- Providing in-house VAT training for accounting and logistics staff
This approach minimizes legal exposure and supports long-term operational efficiency
Conclusion
Yes, Lawyers in Dubai are essential partners for businesses facing customs-related VAT disputes in the UAE. Whether your issue involves a valuation disagreement, rejected refund, import compliance failure, or excessive penalties, legal professionals can intervene with precision, credibility, and strategy.
In a region where tax compliance is evolving rapidly and enforcement is growing more sophisticated, legal mistakes can be costly. By partnering with skilled Lawyers in Dubai, your business not only protects itself in the short term but also builds a robust foundation for customs and tax compliance in the long run.
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