UAE Free Zone Designated Zone VAT Reference 2026 — Special VAT Status Explained
UAE has specific VAT rules for Designated Zones. Here is the complete 2026 reference guide on Designated Zone VAT treatment.
In this guide:
What Is a Designated Zone?
- Designated Zone: A specifically designated geographic area that is treated as outside UAE for VAT purposes on PHYSICAL GOODS only
- Established by Cabinet Decision; not the same as free zones (though many free zones are also designated zones)
UAE Designated Zones List (as of 2026)
- JAFZA (Jebel Ali Free Zone) — partial area
- KIZAD (Abu Dhabi Industrial City)
- Hamriyah Free Zone (Sharjah)
- SAIF Zone (Sharjah Airport International Free Zone)
- Ajman Free Zone
- RAK Maritime City Free Zone
- Fujairah Free Zone
- RAKEZ Industrial Zone
Designated Zone VAT Rules for Physical Goods
- Supply within Designated Zone: Generally outside VAT scope for physical goods
- Supply from Designated Zone to UAE mainland: Treated as import; UAE mainland importer pays VAT
- Import into Designated Zone: Suspended customs duty and VAT on goods staying in zone
Important: Services in Designated Zones
- Services NOT special: The Designated Zone VAT treatment ONLY applies to physical goods; services are subject to standard UAE VAT rules regardless of whether supplier is in a Designated Zone