Freight Shipping between UK and UAE | Rates – Transit times – Duties and Taxes

How to calculate duties & taxes when importing from UK to UAE?

When importing goods from the UK to the UAE, it's essential to accurately estimate the duties and taxes that may apply. This isn't just about the cost of your goods. You'll also need to consider where your goods were originally made or produced, their Harmonized System (HS) Code, the customs value of your goods, the tariff rate applicable to this specific category of goods, and any additional taxes or fees that might be applied by the UAE customs authorities.

In simple terms, the Customs Value is the cost of the goods, including any shipping or insurance fees, while the HS Code is a globally used system of product categorization. Both these factors will be vital in assessing the amount of duty you'll have to pay. Other fees, like warehouse handling or service charges, could also contribute to your final customs bill.

The process begins with identifying the country of manufacture or production for your items. This is a critical step because national duty rates differ significantly based on the origin of the goods. The country of origin doesn't necessarily have to be the country from which you're shipping your goods. Instead, it's about where your goods were created or put together. Start by understanding this aspect thoroughly to avoid any confusion or possible customs duties miscalculations.

Step 1 - Identify the Country of Origin

Understanding where your goods came from – the Country of Origin – sets the foundation for your import activities from the UK to the UAE. Here's why it matters:

1) Trade pacts: The UAE and the UK have unique economic understandings that affect customs duties. Knowing the Country of Origin helps determine if such benefits apply.

2) HS Codes: This step sets you up to accurately determine the Harmonized System (HS) tax codes, which depend on the product and where it's from.

3) Custom Duties: Custom fees may vary depending on the Country of Origin. Knowledge here could save you a lot of money.

4) Import restrictions: The UAE enforces certain restrictions based on the Country of Origin. Be aware – navigating blindly could lead to unexpected issues.

5) Smooth Customs Process: An accurate Country of Origin paves the way for a clear and hiccup-free customs clearance process.

Stay informed about the specific trade agreements between the UK and the UAE. Recognize how each pact influences customs duties and abide by the import restrictions the UAE imposes.

Remember: The ‘Country of Origin’ isn't just a box to tick off. It's the compass that can guide you towards a more predictable, smoother, and cost-effective import process. Plan ahead, stay updated, and let the import journey be an adventurous one.

Step 2 - Find the HS Code of your product

The Harmonized System (HS) code is a standardized numbering system for international trade that classifies traded products. It is a universally accepted method, used in over 200 countries to classify more than 98% of merchandise in international trade. The code is crucial for determining the tariffs, taxes, and rules of trade that apply to a specific product.

In most cases, the simplest means to identify the HS code of a product is to ask the supplier. Suppliers are highly familiar with the products they sell and the associated regulations, including the correct HS code. However, in situations where asking the supplier is not possible, a great alternative is at hand.

Our easy, step-by-step procedure for finding an HS code:

1. Utilize an HS lookup tool, for instance, go to the Harmonized Tariff Schedule.
2. Type the name of your product into the search bar.
3. Locate the HS code in the Heading/Subheading column.

A word of caution though - accuracy is paramount when choosing an HS code. An incorrect HS code may lead to complications like shipment delays and even potential fines. So always make sure to be precise when determining your product's HS code.

Here's an infographic showing you how to read an HS code.

Step 3 - Calculate the Customs Value

Customs value – an often misleading term, right? It's not about the bare cost of your goods. Actually, here's where the cost of insurance, freight, and the product itself come together, known as CIF value.

A simple formula would be: Product Price + Shipping Cost + Insurance = Customs Value. Picture this: you’ve imported equipment worth $1000 from the UK to the UAE, the international shipping cost is $300, and a $200 insurance policy keeps your goods safe. Adding all these, your Customs Value is $1500, not a mere $1000.

So, while preparing for the customs clearance in UAE, keep this in mind. Proper understanding of your Customs Value ensures smooth shipping procedures, and sidesteps any unexpected costs.

Step 4 - Figure out the applicable Import Tariff

Import tariffs, sometimes called customs duties, are the taxes imposed on goods imported into a country. In the UAE, they utilize the Common Customs Law of the GCC States. Now, let's consider a real-world situation where you're importing children's bicycles from the UK, hypothetically with an HS code of 8712.00.

First, refer to the UK's Trade Tariff Look Up Tool by visiting this site - UK Trade Tariff Tool. Input the HS code (in this case, 8712.00) and from the results given, you'll then be able to determine the specific tariff rate that applies to the goods you're importing.

Suppose the tariff rate is 5%. This means that for every $100 worth of bicycles you import into the UAE, you'll pay $5 in import tariffs. Furthermore, custom duties for imported goods in UAE are usually calculated on the CIF value (Cost + Insurance + Freight).

Let's say, you have $5000 worth of bicycles, $200 for insurance, and $300 for freight. Your CIF value is $5500. The total import duty would be 5% of $5500, which equals $275. The understanding and correct calculation of the applicable import tariff is an essential part of successful shipping.

Step 5 - Consider other Import Duties and Taxes

Engaging in cross-border trade can sometimes usher in unexpected costs. Beyond the basic tariff rate, you could be faced with additional import duties and taxes specific to the country of origin and product type. A few examples include the excise duty and anti-dumping taxes.

Consider a hypothetical case where you're importing electronics from the UK. You could be liable to an excise duty of 2%-5%, designed to control the importation of such items. Likewise, anti-dumping taxes, introduced to protect domestic production, might apply if your goods are sold cheaper overseas than in the UK – the rates for this vary widely.

However, the most significant additional expense you need to factor in is the VAT rate. In UAE, VAT stands at 5%. So, if the value of your goods is $10,000, you'll be paying $500 as VAT.

Please bear in mind, though, these are illustrative examples and the actual rates you face may differ dramatically, making it critical to research and consider these factors in your financial planning. This will ensure your import will not hit any unexpected roadblocks, financially or otherwise.

Step 6 - Calculate the Customs Duties

Calculating customs duties can be an entangling task, but breaking it down is the key. Consider it as a combination of three elements: customs value (CV), VAT, and, in certain cases, anti-dumping duties (ADT) and Excise Duty.

Let's consider three different scenarios:

1. If you're importing electronics worth $10,000 from the UK with no VAT, simply multiply the CV by the UAE's standard duty rate of 5%. So, $10,000 x 0.05 = $500 in customs duties.

2. For books valued at $8,000 with a VAT of 20%, first calculate the duty which would be $400. The VAT is calculated on the CV + Duty, thus ($8,000 + $400) x 0.20 = $1,680 in VAT taxes.

3. Importing alcoholic beverages worth $6,000? Here at 5% duty, you'll also need to consider an ADT of 15% and an Excise Duty of 50%. So, first calculate the duty ($300), then the ADT on (CV + Duty), hence ($6,300 x 0.15 = $945). To find the Excise Duty, take (CV + Duty + ADT) x 50%, giving you a hefty $3,622.5.

Remember, formulae can be confusing, and mistakes costly. Here at DocShipper, our expert team can handle your customs clearance, ensuring accurate calculations and saving you from unexpected expenses. Contact us for a free quote in less than 24h, because precision and proficient service is our priority, no matter where in the world you’re shipping.

Bill of Lading

Navigating shipping between the UK and UAE, businesses often grapple with complex documents, and the Bill of Lading is no exception. Acting as your freight's proof of ownership, it has immense influence over your shipping journey. When your consignment reaches Dubai's shores or airports, the possession of this document is pivotal in determining whether the freight gets into your hands or not. Consider a telex release - a digitalized version of this document - for quicker handling and lower costs.

For air cargo, an Air Waybill (AWB) substitutes the Bill of Lading, offering similar proof of ownership. One wise tip? Double-check all details in these forms for accuracy, as a minor discrepancy can result in delayed UAE customs clearances and increased costs. Every second and every dirham counts in global logistics!

Packing List

Navigating through international shipping between the UK and UAE can seem tricky, but armed with the right documents like the Packing List, you're set to conquer the waves or the skies. This document, meticulously curated by you, is like a detailed diary of everything you're shipping.

Whether it's antique furniture or countless boxes of clothing, the Packing List notes quantity, description, and weight of each item. The devil's really in the detail here! This accuracy is pivotal as both the British and Emirati customs rely on it to keep track and ensure nothing unlawful slips through.

For instance, if you're shipping a pallet of books, the list needs to detail the exact count. It's your responsibility in both sea and air freight, and it's absolutely non-negotiable. Because when it comes to customs clearance, 'approximations' could mean prolonged delays, and that's a cost you don't want on your books!

Commercial Invoice

When exporting goods from the UK to the UAE, your Commercial Invoice is the customs authority's best friend. It's the key document that contains details like product description, HS code, country of origin, and the buyer/seller's details.

Say you're shipping antique furniture, your invoice needs a precise description, like '19th-century oak table,' not just 'antique table.' Make sure this aligns with the information on the Bill of Lading to avoid delays. Errors in your Commercial Invoice can lead to costly delays or even confiscation. So, keep it precise, comprehensible, and aligned with other shipping documents. Happy shipping!