Goods Movement — Zone to Mainland and Vice Versa

Goods Movement Between Zones and Mainland

Zone to Mainland (Import)

When goods are supplied from a designated zone to a mainland business:

• Treated as an import of goods into the UAE.
• The mainland recipient must account for import VAT (5%).
• If the mainland business is registered and authorized, reverse charge may apply.
• Customs declarations are required.

Mainland to Zone (Export)

When goods are supplied from the mainland to a designated zone:

• May be zero-rated as an export, provided:
  • The goods are transported to the designated zone.
  • The supplier maintains documentation (transport receipts, customs declarations).
• Input tax on related purchases is recoverable.

Zone to Zone

When goods are supplied between two designated zones:

• Generally outside the scope of UAE VAT.
• No UAE VAT is charged.
• Customs documentation may be required for movement tracking.

Zone to Outside the GCC

When goods are exported from a designated zone to a destination outside the GCC implementing states:

• Zero-rated as an export.
• Export documentation (customs declarations, bills of lading) must be maintained.

Worked Example

A company in Jebel Ali Free Zone (designated zone) sells AED 100,000 of goods to:

1. Another company in the same zone: No VAT (outside scope).
2. A Dubai mainland business: Mainland business accounts for AED 5,000 import VAT.
3. A company in Hamriyah Free Zone (another designated zone): No VAT (outside scope).
4. A customer in India: Zero-rated export.