How VAT and Designated Zones are related ?

Designated Zones are areas where VAT is not applicable. These zones are recognized as excluded from the state of UAE for the purposes of VAT. Conditions for designated zone

> It must be a specific fenced geographical area.

> Entry and exit of movement of goods and individuals to and from must be under security measures and customs controls.

> Storing, keeping and processing of goods must be under internal procedures within the zone

> The procedures set by the authority must be obeyed by the operator of the designated zone

VAT-free supply can be made under the following conditions:

> During the transfer between the designated zones, the goods should not be released, altered or used.

> The rules under customs suspension according to GCC Common Customs Law must be followed while transferring goods.

The VAT on designated zones

> The VAT is applied upon the transfer of goods from a designated zone to the mainland and vice-versa.

> Supply of water or any other forms of energy will be subjected to VAT at the standard rate in designated zones.

> If the transfer of goods is made between designated zones and from a designated zone to oversea/GCC countries and vice-versa, VAT is not applicable.

> If the goods are being self-consumed or used by a third person a VAT of 5% will be charged. In case of exceptions like, if the goods are incorporated, attached or forms part of other goods and used for the sale or production of another good in the same designated zone VAT will not be charged.

List of designated zones

Abu Dhabi

Free Trade Zone of Khalifa Port

Abu Dhabi Airport Free Zone

Khalifa Industrial Zone

Dubai

Jebel Ali Free Zone (North-South)

Dubai Cars and Automotive Zone (DUCAMZ)

Dubai Textile City

Free Zone Area in Al Quoz

Free Zone Area in Al Qusais

Dubai Aviation City

Dubai Airport Free Zone

Sharjah

Hamriyah Free Zone

Sharjah Airport International Free Zone

Ajman

Ajman Free Zone

Umm Al Quwain

Umm Al Quwain Free Trade Zone in Ahmed Bin Rashid Port

Umm Al Quwain Free Trade Zone on Sheikh Monhammed Bin Zayed Road

Ras Al Khaimah

RAK Free Trade Zone

RAK Maritime City Free Zone

RAK Airport Free Zone

Fujairah

Fujairah Free Zone

FOIZ (Fujairah Oil Industry Zone)

If you have any doubt about the designated zones call us 04 443 1604