What is a Designated Zone in UAE ? How it affects VAT ?

designated zone in UAE


A Designated zone in UAE is one among the areas which are treated as outside the state of the UAE for VAT purposes, where VAT is not applicable on supply of goods.


There are certain conditions that must be satisfied as a designated zone, the operator must obey the procedures set by the authority, entry and exit of individuals and goods must be under proper custom control and security measures, there must be internal procedures within the zone for keeping, storing and processing the goods and moreover it should be a fenced geographical area.


In order to make a VAT free supply of goods, make sure that the goods are not released, altered or used while transferring from one designated zone to another. Also follow the rules under customs suspension mentioned under the GCC Common Customs Law while transferring goods.


Situations under which VAT will be applicable in designated zones are:

  • Transfer of goods from the designated zones to mainland and vice-versa
  • Supply of water and all other forms of energy
  • Self-consumed or third person used goods


VAT is not applicable if:

  • Goods are transferred between designated zones
  • Transfer of goods is from a designated zone to overseas/GCC countries and vice-versa
  • Goods are incorporated, attached or forms part of other goods
  • Goods are being used in the production or sale of other goods within the designated zone.


List of designated zones:

Abu Dhabi

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 Monhammed 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)
If you have any doubt regarding designated zones call us on 00971-4-331-2332