VAT in Designated Zones in the UAE

Designated Zones are specific areas in the UAE treated as outside the country for VAT. Businesses in these zones can benefit from special tax rules.

Key Points

1.⁠ ⁠Transactions Within a Zone

- No VAT is charged on supplies made within the same Designated Zone.

2.⁠ Supplies Between Zones

- Moving goods between zones is generally VAT-free, under certain conditions.

3.Supplies to External Entities

- If goods are supplied from a Designated Zone to outside the UAE, VAT may apply unless sent to another zone.

Implications for Businesses

•⁠ VAT Registration

Companies need to register if their taxable supplies exceed AED 375,000 annually.

•⁠ Tax Management

It’s important to distinguish between taxable and exempt supplies to handle VAT correctly.

•⁠ Documentation

Keeping proper records is essential for compliance and filing accurate returns.

Benefits

•⁠ ⁠Cost Savings: Lower tax burdens enhance profits.

•⁠ Growth Opportunities: Ideal for international trade and investment.

•⁠ Supportive Environment: Many zones offer incentives for businesses.

Conclusion

Understanding VAT rules in Designated Zones can help businesses save money and stay compliant.

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Assuring Best Professional Advice Always !! UAE introduces new VAT refund scheme for online shopping: FTA📢

The UAE has introduced a new VAT refund scheme for online shopping by tourists, marking a world-first initiative. This new process, developed with Planet, the VAT refund system operator, aligns with the Federal Tax Authority’s (FTA) goal to adopt proactive solutions and enhance digital competitiveness.

Tourists can now apply for 5% VAT refunds on e-commerce purchases made during their stay in the UAE. 🇦🇪

The steps are straightforward:

1.⁠ ⁠Apply for VAT refunds through registered e-commerce platforms before the items are shipped.

2.⁠ ⁠Provide travel document details and personal information for eligibility verification at the time of purchase.

3.⁠ ⁠Complete the VAT refund registration once identity verification is done during delivery or order fulfillment.

Refunds are processed when tourists exit the country.

Khalid Ali Al Bustani, Director General of the FTA, highlighted the UAE’s achievement in launching this pioneering electronic system, which extends the existing VAT refund benefits from physical store purchases to online shopping. This initiative is part of the FTA’s continuous efforts to innovate and set global standards.

This new system not only enhances the UAE's digital competitiveness but also supports its leadership in tourism and e-commerce sectors.

Connect with to know more about UAE VAT!!

Pioneering the best Advisory and Consultancy services for your business always!🤝🏻