UAE’s FTA says logistics sector adapting well to VAT
Federal Tax Authority (FTA) officials in the UAE have said that the country’s shipping, customs clearance and logistics sectors have showed a high level of responsiveness and cooperation in the implementation of value-added tax (VAT).
The comments came during a VAT awareness workshop attended by nearly 670 stakeholders from the wider land and maritime logistics sectors in the UAE, with the FTA further clarifying guidelines on how VAT would apply to trade between tax-exempt “designated zones”.
There are 20 tax exempt “designated zones” within the UAE. Designated zones differ from other free trade zones in that they are fenced, and have security measures and customs controls.
The FTA said goods transported between designated zones would be exempt from VAT so long as they complied with UAE Customs Law, and no part of a shipment was release, used or altered during the transfer.
Goods originating from a designated zone and intended for consumption in the UAE would be subject to VAT.