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 custom 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.
VAT on designated zones
- 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 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
Free Trade Zone of Khalifa Port
Abu Dhabi Airport Free Zone
Khalifa Industrial Zone
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
Hamriyah Free Zone
Sharjah Airport International Free Zone
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 Free Zone
FOIZ (Fujairah Oil Industry Zone)
If you have any doubt about the designated zones call us 04 443 1604
Confused about VAT? Clear all your doubts, free VAT guide. Download below: