How Customs Duty Is Calculated in the UAE

The Basic Formula

For most goods entering the UAE mainland, customs duty is calculated as:

The standard duty rate applied to most general goods is 5% of the CIF value, though this varies significantly by product category under the GCC Common Customs Tariff.

Worked Example

Say you're importing goods with a supplier invoice value of AED 50,000, freight cost of AED 3,000, and insurance of AED 500:

• CIF Value = 50,000 + 3,000 + 500 = AED 53,500
• Duty at 5% = AED 2,675
• 5% VAT is then applied on top of (CIF Value + Duty) = 5% × 56,175 = AED 2,808.75

Total landed cost for customs purposes: AED 53,500 + AED 2,675 + AED 2,808.75 ≈ AED 58,983.75, before local delivery and clearance service charges.

Duty Rates Vary by Product

• 0% duty — certain food staples, medical equipment, and some raw materials imported for local manufacturing.
• 5% duty — the standard rate applied to most general trade goods.
• 50%+ duty — alcohol and select restricted categories.
• 100% duty — tobacco products.

The exact rate is determined by your product's HS (Harmonized System) code — which is why accurate classification matters so much. Misclassifying a product can mean overpaying duty for months, or under-declaring and facing penalties later.

How Free Zones Change the Calculation

Goods imported into a UAE free zone (such as JAFZA or DAFZA) are not subject to duty at the point of entry. Duty only becomes payable when the goods move from the free zone into the UAE mainland market — at which point the same CIF-based calculation applies. This is why many businesses use free zones to store goods duty-free until they're actually sold locally.

Common Exemptions

• Personal effects and household goods (within limits) for UAE residents relocating
• Goods re-exported without entering the local market
• Certain goods imported by government and diplomatic entities
• Raw materials for specific licensed industrial activities

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