Designated Zones UAE VAT and its Applicability
Free zones in UAE are also known as Free Trade Zones depicting that they are structured to boost the international business economy of the country. Free zones in UAE provides 100% ownership, Repatriation of Capital & Profits, TAX Exemption and many other facilities
The kind of businesses the free zones in UAE largely offer ranges of different activities such as trading, service, industrial, national industrial, and branch licenses. The UAE free zones are either attached to a port or industry specific making it easier for business flow.
The Cabinet Decision No.59 on Designated Zones of UAE VAT Law has categorised Free Zones as Designated Zones for which separate provisions of VAT are applicable. Earlier twenty Free zones were categorised as Designated Zones but now it has been soared up to twenty-three Designated Zones by the Federal Tax Authority in UAE. VAT provisions for Designated Zones are specified in the Cabinet Decision No. (52) on the Executive Regulation of UAE VAT Law Article 51 on Designated Zones.
How is vat in free zone or Designated Zone applicable?
As per UAE VAT Law, any Designated Zone specified by a decision of the Cabinet shall be treated as being outside the State and outside the Implementing States, subject to the following conditions:
- The Designated Zone is a specific fenced geographic area and has security measures and Customs controls in place to monitor entry and exit of individuals and movement of goods to and from the area.
- The Designated Zone shall have internal procedures regarding the method of keeping, storing and processing of Goods therein.
- The operator of the Designated Zone complies with the procedures set by the Authority.
Therefore, any Free zone that fulfils the above conditions and which are included in the decision issued by the Cabinet will be treated as a Designated Zone.
Which are the new Designated Zones in UAE?
According to Federal Tax Authority, the newly added Designated zones are as mentioned below and has come into effect from June 18,2018.
- Al Ain International Airport Free Zone in Abu Dhabi
- Al Bateen Executive Airport Free Zone in Abu Dhabi
- International Humanitarian City – Jebel Ali in Dubai.
Among the above mentioned International Humanitarian City which is in Jebel Ali in Dubai which is likely one of the largest humanitarian hub in the world providing emergency response facilities, registration, licensing along with Government facilities. International Humanitarian City consisting of various members which runs around 70 members including nine UN agencies, 48 non-profit organisations and 13 commercial members. Currently, they have around 45 free zones across the country.
In International Humanitarian City there has been a growth of 6.6 % from the exports of the UAE’s free zones which was valued at Dh225.5 billion in 2017 as per the statement from Central Bank of the UAE data. The UAE is home to being one of the towering free zones globally at 45 and with 10 under construction. Dubai now houses around 30 free zones.
What are the list of Designated Zones in UAE?
|Sl No.||Designated Zone||Location|
|1||Free Trade Zone of Khalifa Port||
|2||Abu Dhabi Airport Free Zone|
|3||Khalifa Industrial Zone|
|4||Al Ain International Airport Free Zone (New)|
|5||Al Bateen Executive Airport Free Zone (New)|
|6||Jebel Ali Free Zone (North-South)||
|7||Dubai Cars and Automotive Zone (DUCAMZ)|
|8||Dubai Textile City|
|9||Free Zone Area in Al Quoz|
|10||Free Zone Area in Al Qusais|
|11||Dubai Aviation City|
|12||Dubai Airport Free Zone|
|13||International Humanitarian City – Jebel Ali (New)|
|14||Hamriyah Free Zone||
|15||Sharjah Airport International Free Zone|
|16||Ajman Free Zone||Ajman|
|17||Umm Al Quwain Free Trade Zone (Ahmed Bin Rashid Port)||
Umm Al Quwain
|18||Umm Al Quwain Free Trade Zone (Sheikh Md Bin Zayed Road)|
|19||RAK Free Trade Zone||
Ras Al Khaimah
|20||RAK Maritime City Free Zone|
|21||RAK Airport Free Zone|
|22||Fujairah Free Zone||Fujairah|
|23||FOIZ (Fujairah Oil Industry Zone)|
How can Emirates Chartered Accountants Group help with UAE VAT in Free zone?
Emirates Chartered Accountant Group serves the clients globally. We are also a member of IECnet which has offices in 70 locations all over the world. Through our international partners, we have wide tax services to offer globally.
Our services on VAT for free zone includes the following:
- TAX Agent
- VAT Implementation
- VAT Registration
- Excise TAX Registration
- VAT Return Filing
- VAT Consultants
- Excise Tax Advisory
- Tax Audit
|VAT Services for UAE Free zones
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