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VAT Free Zones in UAE

The UAE’s Federal Tax Authority has revealed the 20 designated zones which would be exempt from the recently-implemented five per cent VAT in the country.

Is vat applicable for free zone companies in UAE?

The decision has been welcomed by various firms and companies in the Zones. In addition, Cabinet has approved a zero VAT on the supply of certain medications and medical equipment registered with Ministry of Health (MoH).The decision works retroactively from January 1, 2018.

 Mayank Sawhney, the director, MaxGrowth Consulting, said that quite a large number of invoices need to be corrected as VAT would have been applied on certain imports and sales in the designated zones and on medical supplies. Unduly invoiced VAT is not deductible.

Below is the list of the designated zones across the seven emirates that are free from the VAT.

Dubai: Dubai Airport Free Zone; Dubai Aviation City; Dubai Textile City; Free Zone Area in Al Quoz; Jebel Ali Free Zone (North-South); Dubai Cars and Automotive Zone (Ducamz); and Free Zone Area in Al Qusais

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

 Sharjah: Sharjah Airport International Free Zone; Hamriyah Free Zone

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

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

 Umm Al Quwain: Umm Al Quwain Free Trade Zone on Sheikh Mohammed Bin Zayed Road; Umm Al Quwain Free Trade Zone in Ahmed Bin Rashid Port

 Ajman: Ajman Free Zone

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