Is there a difference between a Designated Zone and a Free Zone?
A Designated Zone has certain additional advantages, in terms of claiming preferential tax regime under the UAE corporate tax law. Such Zone, refers to a Free Zone, which is specifically recognised under the UAE VAT laws as a Designated Zone . The advantage is that income derived by a Designated zone from wholesale distribution of goods or materials are eligible for 0% corporate tax rate provided they are supplied to the following: –
- Domestic UAE businesses ;
- Foreign businesses
However the exemption is not available in case the distribution is done directly to the end consumer, whether located in UAE or outside UAE.
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