Jurisdiction: United Arab Emirates · Published and reviewed: 19 October 2026
The FTA listed Public Clarification TAXP010, Free Zones and Designated Zones for Tax Purposes, on 2 October 2026. This explainer covers that clarification; it does not announce a new tax rate or filing deadline.
Does a Free Zone licence settle the tax treatment?
No. The clarification distinguishes status for Corporate Tax, VAT and Excise Tax. A label used for one tax should not be assumed to establish the position for another.
- Corporate Tax: a Designated Zone must be recognised as both a VAT Designated Zone and a Corporate Tax Free Zone. Confirm the relevant status with the Free Zone authority. The 0% rate for a Qualifying Free Zone Person applies to Qualifying Income subject to the prescribed conditions.
- VAT: check the FTA’s Designated Zones list and whether the specific area meets the Article 51(1) conditions, including the required controls and procedures.
- Excise Tax: confirm the specific area’s FTA approval with the Free Zone authority or Warehouse Keeper.
A practical review file for your business
For an organised review, we suggest keeping a short evidence index rather than relying on a folder labelled “Free Zone”. The following is a working-paper checklist, not a new statutory document list:
- Record the legal entity name, licence, operating address and any separate premises involved.
- File the authority’s written response, its date and the precise area it covers.
- Keep distinct Corporate Tax, VAT and, where relevant, Excise Tax review sections.
- List the activities and transaction flows you want reviewed, with sample contracts, invoices and goods-movement records where relevant.
- Assign responsibility for unresolved questions before approving the tax working.
Example: one address, several review questions
A finance team receives a licence and a brief email saying “we are in a designated zone”. A useful next step is to ask which tax the statement concerns, which premises it covers and what evidence supports it. Keep the answers alongside the transaction records. This illustrates a review process; it is not a conclusion about any particular company’s eligibility or VAT rate.
Official source and related support
Read FTA Public Clarification TAXP010 and its underlying legislation before applying it to your circumstances.
Explore our UAE Corporate Tax services and UAE VAT services, or discuss the scope of a review. Any additional advisory work must be agreed separately.
General information only. Transaction treatment and eligibility require a review of the relevant facts and current rules.
