1 July 2026 · Designated zones
VAT in UAE Designated Zones
A "free zone" is not automatically outside VAT. The FTA distinguishes ordinary free zones from designated zones, and even then treatment depends on the supply — especially for goods. Services within designated zones are usually standard-rated at 5%, while certain goods movements can qualify for special treatment with the right documentation. Dubai designated zones include JAFZA, Dubai Airport Free Zone and Dubai CommerCity.
Exiloz Management & Tax Consultant · Dubai-based FTA-focused advisory · VAT, corporate tax & accounting
Designated zone vs ordinary free zone
Only designated zones get special VAT goods treatment.
- The FTA maintains a list of designated zones.
- Ordinary free zones are treated as inside the UAE for VAT.
- Designated-zone goods treatment depends on the movement and documents.
- Services within designated zones are usually 5%.
Zones and documentation
Correct paperwork is what secures the treatment.
- Dubai designated zones include JAFZA, Dubai Airport Free Zone and Dubai CommerCity.
- Goods moving into/between designated zones need distinct documentation.
- Being VAT-registered still means assessing and filing correctly.
- Never assume a free-zone licence removes VAT obligations.
Related guides
Frequently Asked Questions
For free-zone and designated-zone businesses.
Does a free zone mean no VAT?
No. Only designated zones get special VAT treatment for certain goods, and even then it depends on the supply and documentation.
Are services in designated zones taxed?
Services within designated zones are usually subject to the standard 5% VAT.
Which Dubai zones are designated?
They include JAFZA, Dubai Airport Free Zone and Dubai CommerCity, among others on the FTA list.
Can Exiloz advise on our zone treatment?
Yes. We assess your supplies and documentation to apply the correct VAT treatment.
Get your zone VAT treatment right
Exiloz classifies your designated-zone supplies so VAT is applied correctly.