UAE designates 20 free zones exempt from VAT

Transfer of goods will be fenced-off, monitored in designated tax free areas
According to the UAE’s VAT law, the transfer of goods between designated zones, which are defined as specific set geographic areas with security measures in place to monitor the movement of goods and people, are tax free.
By Bernd Debusmann Jr
Thu 11 Jan 2018 10:59 AM

A total of 20 free zones throughout the UAE will be exempt from VAT, according to a document published by the UAE’s Federal Tax Authority (FTA).

An unofficial translation of the cabinet decision posted online by the FTA online lists seven free zones in Dubai, three in Abu Dhabi, three in Ras Al Khaimah, two each in Sharjah, Umm Al Quwain and Fujairah and one in Ajman.

According to the UAE’s VAT law, the transfer of goods between designated zones, which are defined as specific set geographic areas with security measures in place to monitor the movement of goods and people, are tax free.

“Goods may also be transferred between designated zones without being subject to tax if the goods are not used or altered during the transfer process, and the transfer is undertaken in accordance with the rules for customs suspension per GCC Common Customs Law,” a note from Dubai-based Afridi & Angell legal consultants notes.

“The FTA may require a guarantee equivalent to the tax liability of the goods to be transferred in case the conditions for the transfer between designated zones are not met.”

Additionally, the note from Afridi & Angel states that the movement or supply of goods into a designated zone from inside the UAE will not be considered an export of the goods, and will not receive the same zero-rating which applies to exports outside the GCC.

The designated zones:

Abu Dhabi:
Free Trade Zone of Khalifa Port
Abu Dhabi Airport Free Zone
Khalifa Industrial Zone

Dubai:
Jebel Ali Free Zone
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 Mohammed bin Zayed Road

Ras Al Khaimah:
RAK Free Trade Zone
RAK Maritime City Free Zone
RAK Airport Free Zone

Fujairah:
Fujairah Free Zone
Fujairah Oil Industry Zone (FOIZ)

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