Excise Tax Designated Zone in UAE

Excise Tax Designated Zone in UAE

VAT is levied on supplies of goods and services in the UAE territory. Certain areas, called free zones, are omitted from the UAE territory. However, not all free zones are excluded from VAT — only certain free zones listed in a cabinet decision have special restricted regulations for VAT. These listed free zones are called Designated Zones. A designated zone in UAE is an area which is considered to be outside the UAE territory for VAT purposes. 

Supplies made from inside or outside a designated zone are free of VAT (with some exceptions). 



How to identify a designated zone in UAE?

Free zones are not normally considered VAT-free, and are subject to normal VAT for supplies of goods and services. Certain free zones, however, fulfil the criteria specified in the Federal Decree-Law on VAT and Executive Regulations for being treated as a designated zone. 

These designated zones are listed in a cabinet decision. But even if a zone is marked as a designated zone, it still has to fulfil the following criteria to be treated as a territory outside the UAE:

  • The zone must be a fenced area.
  • The zone must have its own security measures and customs control unit for monitoring the movement of individuals and goods in and out of the zone.
  • There must be well-defined regulations for the storing, retrieving and processing of goods within the zone.

The operator of the zone must comply with all the rules and regulations put forth by the FTA.

Businesses operating in designated zones are subject to strict qualifying criteria and must keep thorough records.

List of designated zones in UAE

Cabinet decision No. 59 lists the following free zones as designated zones in UAE.

Abu Dhabi

  • Free Trade Zone of Khalifa Port
  • Abu Dhabi Airport Free Zone
  • Khalifa Industrial Zone
  • Al Ain International Airport Free Zone 
  • Al Butane International Airport Free Zone 

Dubai

  • Jebel Ali Free Zone (North-South)
  • Dubai Cars and Automotive Zone (DUCAMZ)
  • Dubai Textile City
  • Free Zone Area in Al Quiz
  • Free Zone Area in Al Quasits
  • Dubai Aviation City
  • Dubai Airport Free Zone
  • International Humanitarian City – Jebel Ali

Sharjah

  • Khamriya 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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