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Frequently Asked Questions on VAT

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How will VAT recovery for businesses operating in Designated Zones work?

A business located in a Designated Zone will have to adhere to the normal VAT recovery rules as follows:

  • Businesses that make taxable supplies, or make supplies that would be taxable if they took place in the UAE, can recover the VAT paid on expenses in full. 

  • Businesses that make supplies that do not give the right to VAT recovery will be unable to recover VAT on expenses that can be directly attributed to making the supply. 

  • Businesses need to apportion VAT paid on expenses that are partly recoverable and partly non-recoverable. This is to identify the recoverable part. 

  • Businesses must be registered for VAT with the FTA in order to be able to recover VAT. 

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