Tax Public Clarification TAXP010 from the FTA explains what constitutes a Designated Zone for Excise Tax purposes. An Excise Tax Designated Zone is a fenced area established as a free zone, entered or exited only through a designated road, or any area designated by the FTA under the supervision of a Warehouse Keeper. A fenced free zone must restrict movement of individuals and Excise Goods, be supervised by a customs department and have an appointed Warehouse Keeper; for other geographic areas the Warehouse Keeper applies to the FTA for registration. Businesses should confirm status with their Free Zone authority or Warehouse Keeper.
TAXP010
Tax Public Clarification
Free Zones and Designated Zones for Tax Purposes
Issue
In certain instances, Businesses may be established in a Free Zone in the UAE. Businesses operating in a Free Zone may be subject to specific rules and treatment under the Tax Laws (Corporate Tax, Excise Tax, and Value Added Tax) applicable in the UAE.
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