UAE VAT Update: Designated Zones Announced
The FTA has announced 20 Designated Zones from the 45 Free Zones in the UAE will be considered ‘outside the territory’ of the UAE for Import VAT suspension purposes. The Federal Tax Authority (FTA) has published the list of confirmed Designated Zones in Cabinet Decision No 59 of 201&, effective from 1 January 2018.
A Designated Zone which meets the required conditions specified in the Executive Regulations, will be recognised as outside the UAE for Import VAT suspension purposes, allowing for the VAT-free movement or transfer of goods to take place within the Designated Zone.
Businesses located within one of the 20 recognised Designated Zones will be significantly impacted by this decision and should consider whether it is appropriate to charge VAT on their supplies.