VAT Applicability in Designated Zones

Any Designated Zone specified by a decision of the Cabinet shall be treated as being outside the State, subject to the following conditions:

• The Designated Zone is a specific fenced geographic area and has security measures and Customs controls in place to monitor entry and exit of individuals and the movement of goods to and from the area.
• The Designated Zone shall have internal procedures regarding the method of keeping, storing and processing of goods therein.
• The operator of the Designated Zone complies with the procedures set by the Authority.

Even if an area is identified as a Designated Zone, it is not automatically treated as being outside the UAE for VAT purposes. There are many criteria that need to be met in order for a Designated Zone to be treated as outside the UAE for VAT purposes.

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