Free Zone, denotes free trade areas which promote foreign enterprise ownership. The businesses in Free Zones must comply with the rules and regulations of the free zone authority for conducting any business in this region. As per UAE Law, free zones are called a Designated zone. The following conditions meet up the definition for designated zones as per the criteria of Article 51 of the Executive Regulations:
* It is a specific fenced geographic area
* It has security measures and customs controls in place to monitor the entry and exit of individuals and the movement of goods to and from the area
* It has internal procedures regarding the method of keeping, storing and processing of goods within the area
* The operator of the Designated Zone must comply with the procedures set out by the FTA
Therefore, any Free zone which fulfils the above conditions and is in the list of the cabinet will be treated and considered as Designated zones.
Businesses within the designated zone are having similar rules of non-designated zones. According to the UAE VAT Law, the free zone companies need to undergo VAT registration. They are also eligible to register under the group VAT system. As per the VAT implementation rule, the transfer of any goods within these designated zones are tax-free. This rule includes:
These conditions are under UAE VAT law provisions. As the term consumption is overridden in the aspects of designated zones.
Some exceptions include:
|Free Trade Zone of Khalifa Port|
Abu Dhabi Airport Free Zone
Khalifa Industrial Zone
|Jebel Ali Free Zone (North-South)|
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
|Hamriyah Free Zone|
Sharjah Airport International Free Zone
|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 Free Zone|
FOIZ (Fujairah Oil Industry Zone)
CDA offers quality accounting and VAT services for free zone companies in Dubai and UAE. As an auditing firm and tax experts, we help you to take further steps for tax-related purposes which include:
The free zones offer companies a plethora of advantages including a tax-free environment and 100 per cent foreign ownership. Still, there is a requirement for tax services to ensure:
We provide accounting services and VAT services for free zone companies across the UAE. Our versatility in service providing often attracts new clients.
“The team is the best I could receive my requirements on time. I am totally happy with the service received planning to hold hand on-hand experience with CDA”
Managing Director, MOS 5 Tel Trading LLC
Yes, all products and services are VAT free if their import and supply are within the designated zone and outside the UAE.
VAT Service charges depend on the turnover and the number of transactions on supply.
Under common control but not common ownership Group VAT registration is applicable at FTA.
Yes, tax to be charged at 5 % on goods as per the provisions of law.
Goods are non-taxable if they are used by the buyer or third party for the production or sale of another good. Goods are taxable at 5% if they are not used by the buyer or third party for the production or sale of another good.
Under mandatory deregistration, if the company fails to apply within 20 days of the timeframe from the occurrence of the supply, demands a penalty of AED 100,00.
No, it is not necessary to register for VAT if the company does not have a mainland supply.
Treatment of goods exported outside the UAE will be considered as zero-rated and VAT will not be applicable.
No, only those Free Zones which are decided by the UAE Cabinet are considered as Designated Zones. To know the list of Designated Zones, please go through the above contents.
Yes, VAT is applicable at 5% on the supply of Services within Designated Zone and to the mainland.
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