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Abu Dhabi, UAEWednesday 12 December 2018

VAT in UAE: 20 free zones told they are exempt from levy

Areas such as the Free Trade Zone of Khalifa Port and Jebel Ali Free Zone are among those that are exempt

Twenty free zones in the UAE - including Jebel Ali Port in Dubai - will be exempt from VAT. Pawan Singh / The National
Twenty free zones in the UAE - including Jebel Ali Port in Dubai - will be exempt from VAT. Pawan Singh / The National

Twenty free zones in the UAE will be exempt from VAT, bringing an end an anxious wait for businesses unsure if they they would be affected or not.

The Federal Tax Authority (FTA) published a document from the Cabinet on Tuesday January 9 - a week after the country saw the introduction of the five per cent levy on January 1.

Areas such as the Free Trade Zone of Khalifa Port and Jebel Ali Free Zone are among those that are exempt.

"Many businesses will have been waiting for confirmation as to which locations would be 'designated zones', especially given January 1 has come and gone," said David Daly a chartered accountant who leads a consultancy practice in the UAE.

"By backdating the application of designated zone status to the 1st January, there will be relief amongst import/export businesses that were unsure as to the VAT effect where none had been expected.

"One element I am curious about is whether these designated zones have now been issued VAT certificates. My understanding is that Customs require this. Many, many entities have not received theirs."

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The areas included are largely fenced free zones with special controls on goods, rather than areas such as Dubai Media City or those dealing in financial services.

The tax authority had suggested that VAT would be similar to excise tax in the free zones, but there was no confirmation until the Cabinet document, in the name of Sheikh Mohammed bin Rashid, Vice President, Prime Minister and Ruler of Dubai, was published.

Abu Dhabi

Free Trade Zone of Khalifa Port

Abu Dhabi Airport Free Zone

Khalifa Industrial Zone

Dubai

Jebel Ali Free Zone

Dubai Cars and Automotive Zone (DUCAMZ)

Dubai Textile City

Free Zone Area in Al Quoz

Free Zone Area in Al Qusais

Dubai Aviation City

Dubai Airport Free Zone

Sharjah

Hamriyah 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)