Goods exports outside the GCC are zero-rated if shipped within 90 days of supply with proof. Service exports are zero-rated when consumed outside UAE. Without bills of lading, customs export declarations and shipping confirmations, FTA defaults to 5% standard retroactively.
Zero-rating goods exports
A goods export is zero-rated if all four conditions are met:
- Goods physically leave UAE within 90 days of supply
- Shipping is via a recognised mode (sea, air, land) with documented departure
- Customer is located outside the GCC (or qualifying GCC supply with own rules)
- Supplier has documentary proof — bills of lading, customs export declaration, shipping confirmation
Without proof of export, FTA defaults to 5% retroactively — even on supplies that physically left UAE. We’ve seen AED 480K assessments on exporters with weak document trails.
Zero-rating service exports
Service exports follow different rules — based on where the service is consumed, not where the customer is invoiced:
- Services consumed outside UAE by a non-resident customer — zero-rated
- Services consumed inside UAE (even by foreign customer) — 5% standard
- Hybrid services (consultation delivered partly in UAE) need apportionment
- B2B vs B2C distinction matters less than place-of-supply
Documentation FTA expects
Audit-defensible export packs include:
- Bill of lading (sea), airway bill (air), or customs export declaration
- Tax invoice marked ‘zero-rated export’ with customer’s foreign address
- Customer trade-licence or registration document (foreign jurisdiction)
- Bank evidence of payment received from outside UAE
- Shipping company confirmation of departure
5 mistakes that lose zero-rating
- Late shipping — over 90 days, even by 1 day, and the supply becomes 5% standard
- UAE-domiciled buyer with foreign delivery — buyer’s VAT-domicile, not delivery address, determines treatment in some cases
- GCC sales — different rules; some still zero-rated, others standard
- Documents in supplier’s possession only — auditor wants to see them in the supplier’s archive, not the customer’s
- Ex-works (EXW) supplies — supplier has no shipping evidence; risk of FTA reclassifying as local supply
The best exporters keep a digital binder per customer with every export’s full document set. Their FTA audits close in days.— Internal practice across 30+ exporter clients
Refunds for zero-rated exporters
Pure exporters typically run refundable VAT positions — input on local purchases exceeds output on zero-rated exports:
- File refund claim on each VAT return (or carry forward)
- Quick refunds when documentation is clean
- Larger refunds (AED 100K+) trigger automatic FTA review
- Refund recovery rate close to 100% with audit-defensible export packs
Pure exporter? Get a documentation review.
We audit a sample of your exports against FTA requirements and rebuild the document pack where needed.
Frequently asked questions
Are all UAE exports zero-rated?
Goods exports outside GCC are zero-rated if shipped within 90 days with proof. Service exports are zero-rated when consumed outside UAE. GCC supplies have specific rules.
What proof of export does FTA require?
Bills of lading, customs export declaration, airway bills, tax invoices, customer foreign-domicile evidence, payment-from-outside-UAE bank evidence.
What if shipping takes more than 90 days?
The supply becomes 5% standard retroactively. Plan operations to ship within 60 days to give buffer.
Are GCC sales zero-rated?
Depends. Some inter-GCC supplies are zero-rated under specific rules; others are taxable. Each customer-supply combination needs review.
Can I claim refund on input VAT?
Yes — pure exporters typically run refundable balances. File on each return; clean documentation = high recovery rate.
What about EXW (ex-works) exports?
Risk-prone. Supplier has no shipping proof; FTA may reclassify as local supply. Negotiate FCA / FOB terms where possible to keep evidence.
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