UAE Tax: What are Designated Zones in the UAE?

Designated Zone is any specific area assigned by Cabinet Decision to be outside the UAE for Value Added Tax (VAT) purposes.

Territories designated to offer incentives to businesses. For this to happen, a number of conditions need to be fulfilled.

List of Designated Zones in UAE

In total, 20 Zones have been announced as Designated Zones as per the Cabinet Decision.

A) Ras Al Khaimah

1. RAK Free Trade Zone
2.RAK Maritime City Free Zone
3. RAK Airport Free Zone

B) Abu Dhabi

1. Free Trade Zone of Khalifa Port
2. Abu Dhabi Airport Free Zone
3. Khalifa Industrial Zone

C) Sharjah

1. Hamriyah Free Zone
2. Sharjah Airport International Free Zone

D) Dubai

1. Jebel Ali Free Zone
2. Dubai Cars and Automotive Zone (DUCAMZ)
3. Dubai Textile City
4. Free Zone Area in Al Quoz
5. Free Zone Area in Al Qusais
6. Dubai Aviation City
7. Dubai Airport Free Zone

E) Umm Al Quwain

1. Umm Al Quwain Free Trade Zone in Ahmed Bin Rashid Port
2. Umm Al Quwain Free Trade Zone on Sheikh Mohammed bin Zayed Road

F)  Fujairah

1. Fujairah Free Zone
2. Fujairah Oil Industry Zone (FOIZ)

G) Ajman

1. Ajman Free Zone

How is VAT applicable in UAE Designated Zones for Commercial Businesses?

Even if Designated Zones are located inside the territory of the UAE, for VAT purposes, they are dealt with as being outside the UAE for trading with goods.

A) Supply of Goods from and to the Rest of the World (out of the UAE).

B) Supply of Goods Between Designated Zones in the UAE.

C) Supply of Goods from and into UAE Mainland

How to Apply Designated Zone on Deskera Books?

While creating a new organisation under compliance details you have an option “Is your business located in a Designated zone?” by enabling this option you can make your business a Designated zone where no VAT will be imposed.

You also have another option to make your business Designated zone by clicking on the settings, under VAT Details, tick on the option  “Is your business located in a Designated zone?”