November 16, 2022Dated: | Byadmin admin | Free Zone Free zones are economic areas where goods and services can be traded with 100% foreign ownership. Major peculiarities of free zones are: Attracts 0% tax ratesPreferential customs duty rates100% import and export tax exemption One of the obstacles to free zone companies is the prohibition of direct trade within the local market of UAE. Offshore companies can appoint a distributor who can offer the goods and services to the local markets on the agents will get a fee in return. Designated Zones Certain free zones listed in the cabinet decision and meets some conditions specified in the cabinet decisions are called Designated Zones. For VAT purposes Designated Zones are considered to be outside the UAE territory for the VAT purpose. Any supplies between Designated Zones will not attract VAT. Examples of Designated Freestones are JAFZA, DAFZA, RAK, Free Trade Zones, etc. Conditions for Designated Zones; The zone should be within a specific fenced area.The zones should have security measures and customs control over the movement of individuals and goods from and to the zones.The zone should have well-defined internal procedures for the storing, retrieving, and processing of goods within the zones.The operators of the Designated Zones should comply with rules and regulations set up by the Authority. Mainland Mainland in UAE means the locations outside the Free Zone area. A Mainland company is a company which is registered in one of the DED (Department of Economic Development) of UAE which will provide a license to start doing business in UAE. Types of mainland companies; Joint Liability CompanySimple Limited Liability Partnership CompanyLimited Liability Company (LLC)Public Joint Stock CompanyPrivate Joint Stock Company VAT Implications ZonesGoods or ServicesFromToTaxability1Designated Free zoneGoodsDesignated ZoneDesignated ZoneNo VAT Designated ZoneNon-Designated Free zoneVAT @ 5% Designated ZoneMainlandRCM Designated ZoneTo other countriesOut of Scope2Non Designated Free zoneGoodsNon-Designated ZoneNon Designated ZoneVAT @ 5% Non Designated ZoneDesignated Free zoneVAT @ 5% Non Designated ZoneMainlandRCM Non Designated ZoneTo other countriesZero Rated3MainlandGoodsMainlandMainlandVAT @ 5% MainlandDesignated Free zoneVAT @ 5% MainlandNon Designated Free zoneVAT @ 5% MainlandTo other countriesZero Rated4From Other CountriesGoodsFrom Other CountriesDesignated ZoneOut of Scope From Other CountriesNon-Designated ZoneRCM From Other CountriesMainlandRCM Why Flying Colour? According to the requirements of the Commercial Companies Law, all VAT-registered companies must have their financial audits done by a Chartered Accountant who is registered with the Ministry of Finance. A professional tax accountant can ensure that everything is in order, without missing anything, to meet all requirements so that the organization does not attract negative attention from FTA. Flying Colour Tax Consultant LLC, provides audit assistance in resolving tax issues, as auditors can make concrete suggestions for improving the company based on the findings of their records. Additionally, we partner with over 18 agents who are authorized to conduct audits in various jurisdictions, depending on the needs of our clients. Our experts analyze, identify and resolve your business and tax issues. We promise quality and timely support all year round. We provide quality, hassle-free services including Bookkeeping Services, Financial Advisory Services, Consulting Services, Company Registration For VAT in UAE, VAT return filing, Audit assistance, and a lot more.