How VAT and Designated Zones are related ?

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