WTS Dhruva Consultants has published a comprehensive guide on ‘VAT implications on the shipping and logistics sector’ for companies engaged in the business. This is its second publication, the first being on the UAE healthcare.

The guide covers a wide range of topics across various service lines and will be a relevant tool to a wide cross-section of organisations within the sector, as it highlights the VAT implications on transportation, supply/leasing of vessels, warehouses, and courier agencies’ activities.

Dinesh Kanabar, CEO and founder of WTS Dhruva Consultants, says that “a majority of tax jurisdictions apply for exemptions and/or zero-ratings to the inbound and outbound transportation of goods, whereas the transportation of goods locally attracts taxes. In the UAE, inbound and outbound transportation is zero-rated, while the transport of goods locally is subject to VAT at five per cent.”

The guide has deliberated on whether local transportation can be treated as zero-rated if the same is linked to the international movement. It also addresses the VAT treatment on different reimbursable expenses incurred at the port by the shipping lines, freight forwarders, agents, etc.