VAT on Assigned Zone in UAE

A Assigned Zone is an zone which is indicated by the cabinet choice which meets the conditions endorsed within the UAE Official Regulation. In other words, the Assigned Zone could be a VAT free Zone which is considered to be exterior the State of UAE for the reason of VAT. As a result, on any exchange of products between Assigned Zones, VAT Registration will be not be required

To know more around Treatment of Free Zone in VAT and what is Assigned Zone and its conditions, if it’s not too much trouble perused VAT on Free Zone

In this article, we’ll talk about the treatment of supplies made ‘From’ or ‘To’ the Assigned Zones. For ease of understanding, let us categorize the supplies into taking after scenarios.

Supply of products from a Assigned Zone to another Assigned Zone

Supply of merchandise from Assigned Zones to Terrain

Supply of merchandise from Territory to Assigned Zones

Supply of products from Assigned Zone to abroad/ GCC nations

Supply of merchandise from abroad/ GCC nations to Assigned Zone

Supply of administrations inside Assigned Zones

Other special case supplies such as Water, any shape of vitality, self-consumption of merchandise in Assigned Zones etc

VAT treatment on supply of Products related to Assigned Zones

 In spite of the fact that it is treated as exterior the State, not all supplies will appreciate this advantage, a few supplies still draw in VAT at 5%. The reason being, as it were the supply of merchandise will be tax invoice-free subject to certain conditions and depending upon the put of supply, few sort of supplies made from or to the Assigned Zone will be assessable. The table underneath points of interest the VAT appropriateness on supplies made from/to the Assigned Zones.

Sort of Supplies From To Taxability

Products Assigned Zone Assigned Zone Non-Taxable

Merchandise Assigned Zone Terrain* Assessable at 5% VAT

Merchandise Terrain* Assigned Zone Assessable at 5% VAT

Products Assigned Zone Oversea/GCC nations Non-Taxable

Products Oversea/GCC nations Assigned Zone Non-Taxable

Conditions for VAT free supply of products between Assigned Zones

Supplies between the Assigned Zones will not be subject to VAT services as it were in the event that the taking after conditions are met:

The Merchandise are not discharged amid exchange between the Assigned Zones

Merchandise are not in any way utilized or modified amid the exchange between the Assigned Zones

The exchange of products is embraced in understanding with the rules for traditions suspension agreeing to GCC Common Traditions Law

Over and over the conditions which are required to be met for VAT free supply of merchandise between the Assigned Zones, the specialist may ask the proprietor of merchandise to supply a money related ensure for the installment of assess, which that individual may ended up at risk, in case the conditions for development of products are not met.

VAT treatment on Supply of Administrations related to Designated Zone

There’s differential treatment for supply of products and as well as for the supply of administrations between Assigned Zones. Whereas the supply of products between the Assigned Zones are not subject to charge, it isn’t genuine in case of supply of administrations. The reason being, the put of supply of administrations is considered to be interior the State of UAE in case the put of supply is within the Assigned Zone. This suggests, any administrations whether provided from the terrain to Assigned Zone or inside the Assigned Zone, the standard rate of VAT dubai at 5% will be required.

VAT treatment on Supply of Water or any shape of vitality to Assigned Zone

In spite of the fact that the supply of water or all shapes of vitality are considered to be a supply of products but in case of Assigned Zone, these supplies are recognized from other products and treated in an unexpected way. The put of supply of water or any frame of vitality will be considered to be interior the State on the off chance that the put of supply is in a Assigned Zone. This implies, the supply of water and all shapes of vitality provided to Assigned Zone will be subject to VAT at 5% within the same way it would be within the non-Designated Zone zones of the UAE.

Self-consumption of goods supplies to Assigned Zone

On the off chance that the supply of merchandise made inside a Assigned Zone is to be utilized either by the proprietor or a third individual, at that point the put of supply will be within the State of UAE. This infers that all the self-consumed merchandise inside Assigned Zones will be subject to VAT at 5%. Be that as it may, there are certain uncommon scenarios where the utilization of merchandise inside a Assigned Zone will not be subject to VAT. The taking after are the special cases scenarios:

Merchandise are joined into other products,

Merchandise are joined to other products,

The utilization of products is such that it shapes portion of other products,

Goods are utilized within the production or deal of another great found within the same Designated Zone.

Merchandise found in Assigned Zone on which VAT isn’t paid

The utilization of products found in a Assigned Zone on which the proprietor has not paid VAT will be treated as imported into the State by the owner and will be subject to VAT certificate in case they are unaccounted. Be that as it may, in the event that these products are expended by the proprietor within the scenarios recorded over (self-consumption scenarios) will not be subject to VAT.

List of Assigned Zone in UAE

Emirate Assigned Zone

Abu Dhabi Free Exchange Zone of Khalifa Harbour

Abu Dhabi Air terminal Free Zone

Khalifa Mechanical Zone

Dubai Jebel Ali Free Zone (North-South)

Dubai Cars and Car Zone (DUCAMZ)

Dubai Material City

Free Zone Zone in Al Quoz

Free Zone Region in Al Qusais

Dubai Flying City

Dubai Airplane terminal Free Zone

Sharjah Hamriyah Free Zone

Sharjah Air terminal Worldwide Free Zone

Ajman Ajman Free Zone

Umm Al Quwain Umm Al Quwain Free Exchange Zone in Ahmed Canister Rashid Harbour

Umm Al Quwain Free Exchange Zone on Sheikh Mohammed Canister Zayed Street

Ras Al Khaimah RAK Free Exchange Zone

RAK Sea City Free Zone

RAK Air terminal Free Zone

Fujairah Fujairah Free Zone

FOIZ (Fujairah Oil Industry Zone)


It’s clear that VAT treatment for supplies related to Assigned Zones are distinctive depending on the sort of supplies. Firstly, the benefit of VAT exception is accessible as it were for the supply of merchandise in certain scenarios and supply of administrations inside the Assigned Zone are assessable. Besides, in arrange to be qualified for VAT Registration uae exclusion on the supply of products inside the Assigned Zones, conditions, as endorsed in UAE Official Directions are required to be met. Thus, for businesses, it is truly imperative to get it VAT treatment on supplies carried out by them, evaluate the affect of VAT on their commerce and appropriately arrange.

You can also Register for VAT Registration on our website: 


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