The Federal Tax Authority has issued Cabinet Decision no. 59 of 2017 on Designated Zones (“Cabinet Decision”) for the purposes of Federal Law no. 8 of 2017 on Value Added Tax (“VAT Law”).

Art. 50 of the VAT Law had initially made references to designated zones, and Art. 51 of the Executive Regulations to the VAT Law had included requirements for designated zones, and referred to the Cabinet Decision which had not yet been issued until now.

The Cabinet Decision has specified the designated zones to be the following:

United Arab Emirates Designated Zone
Abu Dhabi ·         Free Trade Zone of Khalifa Port

·         Abu Dhabi Airport Free Zone

·         Khalifa Industrial Zone

Dubai ·         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

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 Shaikh Mohammad Bin Zayed Road

Ras Al Khaimah ·         RAK Free Trade Zone

·         RAK Maritime City Free Zone

·         RAK Airport Free Zone

Fujairah ·         Fujairah Free Zone

·         FOIZ (Fujairah Oil Industry Zone)


The UAE Cabinet has the authority to amend the list of designated zones. Once again, it is important to consider all the rules for the designated zones which are stipulated in the Executive Regulations. The transfer of goods between the designated zones shall not be subject to tax if the following conditions are met:

  • The goods (or any part thereof) are not released and are not used in any way or altered during the transfer between the designated zones
  • The transfer is undertaken in accordance with the rules for customs suspension according to the GCC Common Customs Law

The relevant authorities may require the owner of the goods to provide a financial guarantee for the payment of tax should the conditions for the movement of goods not be met in accordance with the VAT Law and Executive Regulations.

In the event the supply of goods made within a designated zone to a person to be used/consumed by him or a third person, then the place of supply shall be considered the state, and therefore subject to VAT. Certain conditions will apply.

Furthermore, it is important to note that Art. 6 of the Executive Regulations indicates that the supply of services within the designated zones shall be considered in the state, and therefore subject to VAT. Consequently, any businesses offering their services in the above mentioned designated zones shall account for VAT, as any other onshore businesses would.

If you have any questions regarding the Cabinet Decision, or any other VAT related concerns, please feel free to contact us by email info@fichtelegal.comor phone +971 44 347 577.

Author: Sarra AlSamarrai.

Fichte Legal

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