One of the biggest advantages of Incoterms is that it facilitates uniformity and it standardizes all the trade aspects which are complex in nature. It avoids ambiguity among the traders by providing them with a common medium to communicate the terms and conditions of international trade. It is also continuously updated and modified by the International Chamber of Commerce (ICC) as the incoterms are the registered trademark of International Chamber of Commerce (ICC).
Importance of Incoterms for the businesses in UAE
After the introduction of Value Added Tax in the UAE Incoterms became a term that is commonly used in the trade. The traders may not have a complete idea of how the Value Added Tax is charged on the import and export of goods and services in UAE, especially the reverse charge mechanism concept which the traders of other countries may not be well aware of. So, in such situations, the Incoterms may help to communicate and simplify the confusion. The business companies in UAE need to be aware of various Incoterms as the duty costs and the tax is computed of various supplies against these Incoterms in UAE. It would be very appreciable if the business companies in UAE may specify their Incoterms to other companies before they enter into international trade.
