Dubai Customs has issued an announcement that, effective 1 January 2019, all commercial and industrial companies operating under licenses issued by any of the free zones in the Emirate of Dubai and holding a customs code issued by Dubai Customs will have to comply with the new inventory system requirements, and all such companies that do not have an inventory system, are required to implement an inventory management system that will meet the new requirements of Dubai Customs before 1 January 2019. Those affected Free Zone companies which already have an inventory system must modify it in accordance with the new requirements of Dubai Customs, and may possibly require process changes to facilitate the necessary data capture for reporting purposes.
The inventory management system must be capable of providing the following data which will reconcile the quantities of "inbound" and "outbound" inventory items for audit purposes, as follows:
In cases where a concerned Free Zone company uses other companies for logistics or customs clearance, should the logistics company use the customs code of the Free Zone company, the affected Free Zone company will be obliged to provide the required inventory movement records, however should the logistics company use its own customs code, then the requirement for a the new inventory management and reporting falls onto the logistics company.
From a business perspective, the proposed inventory management system and inventory movements records will be beneficial to the affected Free Zone companies by allowing them to track both inbound and outbound inventory items and identify any discrepancies raised by reports.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.