Dubai launches cross-border e-commerce customs duty platform

Out-Law News | 04 Feb 2020 | 1:38 pm | 1 min. read

The development of a cross-border e-commerce customs duty platform in Dubai demonstrates the fast pace at which the Dubai authorities have addressed changes to the way trade is taking place both regionally and globally, from an economic and tax perspective, a Middle East tax expert has said.

Joanne Clarke of Pinsent Masons, the law firm behind Out-Law, was commenting after Dubai Customs announced the launch of the new platform following a successful pilot in September last year.

The first phase of the platform project, which involved establishing a blockchain platform to facilitate e-commerce export transactions through couriers, was completed in September 2019. The second phase will facilitate e-commerce import, declaration consolidation and automated refunds, and reduce fees and charges in addition to bringing logistics companies on to the platform. 

Dubai Customs director general Ahmed Mahboob Musabih said the initiative would increase local e-commerce activity and reduce the cost of e-commerce transactions by 20%.

“It is a well-known fact, that no economy, industry or tax regime can avoid technological advances and that they must accept and adapt, in order to keep up with the business and social world we currently live in,” Clarke said.

“In addition, e-commerce is a specifically tricky way of doing business often characterised by high volumes and low values, remote ownership of goods, multiple parties in the supply chain and various shipping, warehousing, payment processing options that may be used,” Clarke said.

Clarke said all Gulf states, including the United Arab Emirates, had a short-to-medium term goal to increase foreign direct investment, encourage more stable and sustainable industries to establish themselves more substantially in the region, and to increase attractiveness for tourism and expatriates. Those initiatives are designed to counter the negative effects of oil prices and fossil fuel dependency in the region.

“These goals can only be achieved through the implementation of regulations and initiatives which make it easier and more advantageous to come to the region for business or pleasure," Clarke said. "The move toward smart systems, such as this new Dubai Customs e-commerce platform, which in essence should minimise the administrative time and cost of doing business in the region, impacting directly on the speed of the supply chain, is one of many changes which should contribute to achieving these aims."

Clarke said the implementation of the platform would be the real test, as the concept of new systems and procedures can often differ from the way they are applied in day-to-day use.