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Do you ship products from the rest of the world to KSA or UAE using Fetchr?

You are a business located outside of UAE and KSA, and are using Fetchr to move your products to UAE and KSA. Fetchr does cash on delivery (COD) as well as prepaid or credit card (CC) deliveries for you.

I. Import VAT and Customs Duties of Goods

Will I be impacted by VAT?-

Yes. According to the Article 50 of the UAE law and Article 14 and 33 of the KSA law from January 1st, 2018, there will be an Import VAT of 5% on Commercial Invoice (CI) value of goods (termed as Total Amount in Fetchr Systems) that will be charged at the port by the authorities.

Please note that Import VAT is calculated on the Total Amount which is pushed by the client to Fetchr system.

Will I be impacted by Customs Duties?+

Yes. For all products that cross the threshold provided by the UAE and KSA government, there will be Customs Duty on the Total Amount value.

Please note custom duties vary extensively, however, Fetchr’s system will calculate customs duty at a flat % on the Total Amount.

This % is average of customs cost based on the nature of product moved for the client and country of delivery.

How is VAT and Customs duty calculated by Fetchr?+

Import VAT will be calculated on CIF (Cost of product, insurance and Freight) + Customs Duties + Excise value.

Fetchr pays the % Customs and % Import VAT at the port on the Total Amount pushed by the client to Fetchr’s system.

Example:
Total Amount (pushed by client to Fetchr) = AED 1,000
Customs - 5% on 1,000 = AED 50
Import VAT - 5% on 1,050 = AED 52.5

Note that customs duty and Import VAT are not a charge by Fetchr, these are from the UAE and KSA governments and it is compulsory to be compliant with these government regulations to do business.

What is Total Amount?+

Total Amount is an ALL INCLUSIVE value pushed to the Fetchr system. It is the same as Commercial Invoice (CI) issued to the customer.

Fetchr will calculate % customs and % Import VAT on Total Amount value, deduct the taxes and duties paid on your behalf from the Total Amount and remit the difference back to the client.

This is because Fetchr pays the Customs Duty and Import VAT at the port of entry into the country.

**The currency for Total Amount should always be that of the delivering country, if not Fetchr will reserve the right to convert to the local country currency and Fetchr will carry forward the same value for the rest of the process**

Example:
Customer Location = KSA; Currency of Total Amount = SAR
Customer Location = UAE; Currency of Total Amount = AED

Can I undervalue my products at the port in order to pay less tax?+

No, undervaluing products is illegal and Fetchr does not support or recommend any such transaction and does not accept any responsibility for any penalties, and fines or loss thereof.

Definition of the customs value according to GCC customs law “the transaction value is the price actually paid or payable for the goods when sold to an importer of any of the GCC countries”.

Cash on Delivery (COD) Value = Commercial Invoice (CI) Value = Total Amount (TA)
Credit Card/Prepaid Value = Commercial Invoice (CI) Value = Total Amount (TA)

All my deliveries are prepaid or credit card. Does Import VAT and Customs duty impact me?+

Yes. Import VAT and Customs Duty are charged on all orders (prepaid/credit card orders) by the government.

Clients will push Total Amount at which they made a sale to the customer which is an all inclusive value (inclusive of VAT, Customs duty, excise, other costs) to the Fetchr system. Fetchr will then calculate % customs and % Import VAT on Total Amount value and invoice the same to the client which is to be paid on receipt.

This is because Fetchr pays the Customs Duty and Import VAT at the port for the client.

How do I plan for Import VAT and Customs Duties? +

It is advisable to hire tax consultants to address tax optimisation at your end. Please note that VAT is not a cost of doing business, it is always borne by the end customer.

This implies that the Total Amount pushed by client to Fetchr is inclusive of all “cost, insurance and freight as well as taxes such as VAT and Customs duty.”

New I ship my products from rest of the world to KSA through UAE (OR) rest of the world to UAE through KSA. Will I be charged Customs duty and Import VAT twice? +

Yes. According to the GCC VAT law, Import VAT and customs duty is to be paid at the KSA port irrespective of whether the Import VAT was paid at the UAE port.

This implies that there will be Import VAT and customs duty calculated twice on the Total Amount and Fetchr reserves the right to deduct this from the COD amount while remitting it back to the client.

How do I pay for VAT and Customs Duties? +

The below are the three steps of paying customs and Import VAT in UAE and KSA.

  1. 1. Fetchr pays the duties and taxes on behalf of the client at the port on the Total Amount.
  2. 2. Fetchr calculates the duties and taxes paid at the port on the Total Amount
  3. 3. Fetchr will recover the VAT and Customs duty from the COD collected. If the COD amount is less than the duties paid by Fetchr or if you are an only Credit Card (CC) client, then Fetchr will invoice the same amount which is to be paid immediately upon receipt of the invoice (no credit period).

II. VAT on International Delivery Service

Will there be VAT on Fetchr’s International Delivery Services?-

No. There will NOT be any VAT on the services provided by Fetchr since International deliveries are charged at 0% as per the law

International Delivery Service is defined when Fetchr picks up the products from outside of UAE or KSA and directly delivers it to the end customer in UAE or KSA.

For any further clarification, please contact your respective Fetchr account managers to confirm the pricing of our services.

Who should be the Consignee on the Airway bill? +

The consignee should ALWAYS be the end customer on all deliveries, the consignee must NEVER be Fetchr.

Cash on Delivery order - End Customer
Prepaid order - End Customer

In case of non-compliance, the order will not be processed by Fetchr until rectified

III. Invoicing for International Delivery Service

What are the steps when there are goods returned by customer or reverse logistics?-

According to Article 47 2(d) of the UAE regulations, returned goods are exempted from VAT. This means, if Fetchr is returning the products back to the client due to unsuccessful delivery, there will NOT be VAT on such deliveries.

Will the invoicing from Fetchr look different? +

Yes. It will now comply with the VAT laws of KSA and UAE.

Which Fetchr entity will invoice the client? +

MENA 360 DWC LLC will invoice your entity for all international deliveries.

How can I comply with the law? +

Please click here and fill out the form with the requested details which will make our clients compliant.

I. Import VAT and Customs Duties of Goods

Will I be impacted by VAT?

Yes. According to the Article 50 of the UAE law and Article 14 and 33 of the KSA law from January 1st, 2018, there will be an Import VAT of 5% on Commercial Invoice (CI) value of goods (termed as Total Amount in Fetchr Systems) that will be charged at the port by the authorities.

Please note that Import VAT is calculated on the Total Amount which is pushed by the client to Fetchr system.

Will I be impacted by Customs Duties?

Yes. For all products that cross the threshold provided by the UAE and KSA government, there will be Customs Duty on the Total Amount value.

Please note custom duties vary extensively, however Fetchr’s system will calculate customs duty at a flat % on the Total Amount

This % is average of customs cost based on the nature of product moved for the client and country of delivery.

How is VAT and Customs duty calculated by Fetchr?

Import VAT will be calculated on CIF (Cost of product, insurance and Freight) + Customs Duties + Excise value.

Fetchr pays the % Customs and % Import VAT at the port on the Total Amount pushed by the client to Fetchr’s system.

Example:

Total Amount (pushed by client to Fetchr) = AED 1,000

Customs - 5% on 1,000 = AED 50

Import VAT - 5% on 1,050 = AED 52.5

Note that customs duty and Import VAT are not a charge by Fetchr, these are from the UAE and KSA governments and it is compulsory to be compliant with these government regulations to do business.

What is Total Amount?

Total Amount is an ALL INCLUSIVE value pushed to Fetchr system same as Commercial Invoice (CI) issued to the customer.

Fetchr will calculate % customs and % Import VAT on Total Amount value, deduct the taxes and duties paid on your behalf from the Total Amount and remit the difference back to the client.

This is because Fetchr pays the Customs Duty and Import VAT at the port of entry into the country.

Can I undervalue my products at the port in order to pay less tax?

No, undervaluing products is illegal and Fetchr does not support or recommend any such transaction and does not accept any responsibility for any penalties, and fines or loss thereof.

Definition of the customs value according to GCC customs law “the transaction value is the price actually paid or payable for the goods when sold to an importer of any of the GCC countries”.

Cash on Delivery (COD) Value = Commercial Invoice (CI) Value = Total Amount (TA)

Credit Card/Prepaid Value = Commercial Invoice (CI) Value = Total Amount (TA)

All my deliveries are prepaid or credit card. Does Import VAT and Customs duty impact me?

Yes. Import VAT and Customs Duty are charged on all orders (prepaid/credit card orders) by the government.

Clients will push Total Amount at which they made a sale to the customer which is an all inclusive value (inclusive of VAT, Customs duty, excise, other costs) to the Fetchr system. Fetchr will then calculate % customs and % Import VAT on Total Amount value and invoice the same to the client which is to be paid on receipt.

This is because Fetchr pays the Customs Duty and Import VAT at the port for the client.

How do I plan for Import VAT and Customs Duties?

It is advisable to hire tax consultants to address tax optimisation at your end. Please note that VAT is not a cost of doing business, it is always borne by the end customer.

This implies that the Total Amount pushed by client to Fetchr is inclusive of all “cost, insurance and freight as well as taxes such as VAT and Customs duty.”

How do I pay for VAT and Customs Duties?

The below are the three steps of paying customs and Import VAT in UAE and KSA.

  • 1. Fetchr pays the duties and taxes on behalf of the client at the port on the Total Amount.
  • 2. Fetchr calculates the duties and taxes paid at the port on the Total Amount
  • 3. Fetchr will recover the VAT and Customs duty from the COD collected. If the COD amount is less than the duties paid by Fetchr or if you are an only Credit Card (CC) client, then Fetchr will invoice the same amount which is to be paid immediately upon receipt of the invoice (no credit period).

II. VAT on International Delivery Service

 

Will there be VAT on Fetchr’s International Delivery Services?

No. There will NOT be any VAT on the services provided by Fetchr since International deliveries are charged at 0% as per the law

International Delivery Service is defined when Fetchr picks up the products from outside of UAE or KSA and directly delivers it to the end customer in UAE or KSA.

For any further clarification, please contact your respective Fetchr account managers to confirm the pricing of our services.

Who should be the Consignee on the Airway bill?

The consignee should ALWAYS be the end customer on all deliveries, the consignee must NEVER be Fetchr.

Cash on Delivery order - End Customer

Prepaid order -  End Customer

In case of non-compliance, the order will not be processed by Fetchr until rectified


 

III. Invoicing for International Delivery Service

 

What are the steps when there are goods returned by customer or reverse logistics?

According to Article 47 2(d) of the UAE regulations, returned goods are exempted from VAT. This means, if Fetchr is returning the products back to the client due to unsuccessful delivery, there will NOT be VAT on such deliveries.

Will the invoicing from Fetchr look different?

Yes. It will now comply with the VAT law of KSA and UAE.

Which Fetchr entity will invoice the client?

MENA 360 DWC LLC will invoice your entity for all international deliveries.

How can I comply with the law?

Please click here and fill out the form with the requested details which will make our clients compliant.

 

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