UAE: Revised VAT rules regarding “designated zones” and goods so
News, VAT

UAE: Revised VAT rules regarding “designated zones” and goods sold via electronic platforms

The UAE Cabinet in October 2021 issued guidance—Decision No. 88 of 2021—that amends the value-added tax (VAT) rules regarding “designated zones.”

The amendments are effective 29 October 2021.

The VAT regulations (specifically Article 51(5)) are amended to revise the rules for the following situations when the supply of goods within a designated zone will be treated as having a place of supply outside the UAE so that the supply of the goods will not be subject to (or will be outside the scope of) VAT in the UAE.

  • The goods were intended to be incorporated into or used in the production of other goods in the designated zone.
  • The goods are delivered to a place outside the UAE (as supported by official and commercial evidence kept by the supplier).
  • The goods are imported from the designated zone to the mainland UAE (as supported by proof that import VAT has been paid).

Shipping and delivery services

Existing Article 51(6) of the VAT regulations treats the supply of services within a designated zone as having the place of supply inside the UAE and therefore is subject to VAT. New Article 51(7) has been added to provide an exception to this rule for shipping and delivery services.

There are a number of cumulative conditions that need to be satisfied to qualify for this exception—namely, the services need to relate to goods supplied by a non-resident and unregistered entity, and only if the goods are being sold through an independent electronic platform (which itself cannot be the owner of the goods).

When the supply of the goods will be out of scope by virtue of revised Article 51(5), the related shipping and delivery services will then also be out of scope. 

For more information on these services, please contact us:

Tel: +971 43 23 1183
Mob: +971 55 899 5971

News Courtesy: KPMG

Ahmed Saleh Al Nuaimi Auditors and Accountants is a unique, high-spirited team of Certified Public Accountants ,  Chartered Accountants ,  Certified Management Accountants and Auditors making creative and innovative contributions to our clients and our community. The insights and quality services we provide help build trust and confidence among our clients. We offer an integrated array of specialized services including Audit, Accounting,Tax, Consulting and Advisory

Head Office

Office No.215, Abdulla Ahmad Mohammed Bin Fahad 4, Al Qusais 2, Dubai, UAE

Tel: +971 43 23 1183
Mob: +971 55 899 5971

Sun-Thu: 8:00 – 6:00
Sat: 8:00 – 6:00

Ras Al Khaimah

B01_G08, BU01
Al-Hamra Industrial Zone
Ras Al Khaimah, UAE

Mob: +971 55 899 5971



Suave Besto Consultancy WLL 708B , Road No 1513 , Block 215 Muharraq , Bahrain.

T: +973 3944 2143 | +973 3396 2350



No:55 and 55/1,
6th Phase, JP Nagar
Bangalore, Karnataka

Tel: +91 80 412 02633
Mob: +971 55 899 5971