Home GCC UAE UAE tax authority outlines VAT exempt free zones A number of free zones have been designated outside of the country for VAT purposes by Staff Writer January 10, 2018 The UAE’s Federal Tax Authority has published a list of free zones in the country that are able to transfer goods between each other without being subject to value added tax. The emirates implemented the 5 per cent VAT rate on January 1 and it applies to most goods and services like food and beverage items, utilities and fuel. Read: Revealed: Goods and services subject to VAT in the UAE The cabinet list of 20 designated free zones in the country are considered outside of the UAE for tax purposes provided the zone managers have internal procedures for keeping, storing and processing of goods. The acquisition of goods within a zone for incorporation into another unconsumed good within the same designated zone will not be subject to VAT. However, the movement or supply of goods into a zone from the rest of the country will not be covered by this rule. In addition, companies within the designated zones that provide services will still be considered onshore and have to pay tax. Interestingly the list does not include most of those in Dubai, which is home to the majority of the 45 free zones in the country. The list Abu Dhabi The free trade zone of Khalifa Port Khalifa Industrial Zone Abu Dhabi Airport Free Zone Dubai Jebel Ali Free Zone Dubai Cars and Automotive Zone Dubai Textile City The free zone areas of Al Quoz and Al Qusais Dubai Aviation City Dubai Airport Free Zone Sharjah Hamriyah Free Zone Sharjah Airport International Free Zone Ajman and Umm Al Quwain Ajman Free Zone 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 Earlier this week the UAE’s Ministry of Finance said the tax would have only a “small impact” on society, amid cost of living concerns from some residents. Read: UAE finance ministry says VAT will have “small impact” on society Ministry of Finance undersecretary Younis Haji al-Khouri said the tax would particularly provide a boost to exempt sectors like health and education. 0 Comments