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Old Oct 22nd 2017, 11:57 am   #1
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Default VAT re companies with JAFZA

Sorry folks to bang on about this...but does anyone know for sure if companies within JAFZA do not have to be VAT compliant? There are no frigging online clear guidelines on this and i am now getting hounded by my UK head office to get this frigging sorted.
I have been informed by several accountancy firms (who i approached) who all said because we are a company within JAFZA we are not VAT complaint, but it would help to get some 'proof' to back this up. Any help would be greatly appreciated.
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Old Oct 22nd 2017, 12:42 pm   #2
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Default Re: VAT re companies with JAFZA

Don't know for sure, but I thought the whole purpose of the Free Zone was so that you can do business in the region, but not with "mainland" UAE - not that anyone follows that rule of course.

For example, if you're importing goods to Jebel Ali Port, then "export" them to a customer in Satwa, you pay customs duty. If you import to Jebel Ali, then export to say Bahrain without leaving the free zone, then no VAT is applicable. So either way, you're not paying VAT.

That said, the invoices you will receive from most UAE suppliers will have VAT on them, so you'll probably want to register for VAT so that you can claim back the input tax. Any supply of services outwith the free zone, you'd be able to add VAT to your invoice with no real disadvantage.

I think. Still waiting for someone to arrange a seminar for our company.
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Old Oct 22nd 2017, 12:52 pm   #3
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Default Re: VAT re companies with JAFZA

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Originally Posted by Gavtek View Post
Don't know for sure, but I thought the whole purpose of the Free Zone was so that you can do business in the region, but not with "mainland" UAE - not that anyone follows that rule of course.

For example, if you're importing goods to Jebel Ali Port, then "export" them to a customer in Satwa, you pay customs duty. If you import to Jebel Ali, then export to say Bahrain without leaving the free zone, then no VAT is applicable. So either way, you're not paying VAT.

That said, the invoices you will receive from most UAE suppliers will have VAT on them, so you'll probably want to register for VAT so that you can claim back the input tax. Any supply of services outwith the free zone, you'd be able to add VAT to your invoice with no real disadvantage.

I think. Still waiting for someone to arrange a seminar for our company.
Thanks GAV, it's this grey area that i am not sure of....i was informed by the accountancy firms i approached, that because we are in JAFZA we are not VAT compliant and hence no need to register for VAT. But if our suppliers outside the free zone are going to charge us VAT on any sales of goods and services that are vatable, then surely we need to register for VAT so that we can claim it back? unless of course they will not charge us VAT because we are in JAFZA (just like we don't get charged for VAT on any goods and services from the UK). It's on this that i can't seem to get any clear indication on.
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Old Oct 22nd 2017, 12:53 pm   #4
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Default Re: VAT re companies with JAFZA

Can you not use the accountancy firms emails/proposals etc as evidence for not complying with the VAT regulations ?


(I wouldn't put much weight on what any of the 'big 4' say - even this morning I had an email from them which was obviously wrong i.e. quoting some regulations and missing the figure by 450%!!!)
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Old Oct 22nd 2017, 12:58 pm   #5
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Default Re: VAT re companies with JAFZA

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Originally Posted by UKCityGent View Post
Can you not use the accountancy firms emails/proposals etc as evidence for not complying with the VAT regulations ?


(I wouldn't put much weight on what any of the 'big 4' say - even this morning I had an email from them which was obviously wrong i.e. quoting some regulations and missing the figure by 450%!!!)
I did initially approach KPMG (who are our auditors) but they were just way off the chart and not really interested in guiding us at all - other than quoting us $57k to 'assist' us in registration and implementation of the VAT. Without even taking note that we are free zone company. Suffice to say my UK head office completely vetoed that proposal.
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Old Oct 22nd 2017, 1:18 pm   #6
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Default Re: VAT re companies with JAFZA

does anyone have the online registration link? I can't even find this anywhere on the net! so bl00dy frustrating.
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Old Oct 22nd 2017, 1:21 pm   #7
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Default Re: VAT re companies with JAFZA

Does this help ?


https://www.innovatetax.com/uae-vat-...ing-free-zones
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Old Oct 23rd 2017, 8:38 am   #8
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Default Re: VAT re companies with JAFZA

tax.gov.ae
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Old Oct 23rd 2017, 8:50 am   #9
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Default Re: VAT re companies with JAFZA

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tax.gov.ae
Thanks guys but neither of those are helpful.
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Old Oct 23rd 2017, 10:27 am   #10
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Default Re: VAT re companies with JAFZA

Why do you not just visit the JAFZA offices and enquire, surely that should be your first port of call???

Failing that go to the MoF and ask there....if nothing else you can get the whole afternoon off trying111
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Old Oct 23rd 2017, 10:37 am   #11
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Default Re: VAT re companies with JAFZA

Non-compliance: Penalties for failing to take taxes seriously in UAE | ZAWYA UAE Edition
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Old Oct 23rd 2017, 11:24 am   #12
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Default Re: VAT re companies with JAFZA

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Why do you not just visit the JAFZA offices and enquire, surely that should be your first port of call???

Failing that go to the MoF and ask there....if nothing else you can get the whole afternoon off trying111
yaar trust me if it was as easy as that i would have done it...the JAFZA offices don't know what their right hand is doing from their left hand...the administration over there is just as poor, if not more so, then all other gvt departments/entities.
And to be honest the last place i want to go too is the MoF...i'll be passed from pillar to post.
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Old Oct 23rd 2017, 11:24 am   #13
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Default Re: VAT re companies with JAFZA

thanks MILLY, always helpful as usual
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Old Oct 23rd 2017, 11:51 am   #14
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Default Re: VAT re companies with JAFZA

According to this article, the decision on how the Free Zones will be treated has been deferred to the Executive Regulations which have not been released yet:

https://www.thenational.ae/business/...w-law-1.623648

They are probably still figuring out how VAT will apply in the free zones where the boundaries are more blurred like JLT/DMCC.
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Old Oct 23rd 2017, 12:12 pm   #15
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Default Re: VAT re companies with JAFZA

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Originally Posted by Gavtek View Post
According to this article, the decision on how the Free Zones will be treated has been deferred to the Executive Regulations which have not been released yet:

https://www.thenational.ae/business/...w-law-1.623648

They are probably still figuring out how VAT will apply in the free zones where the boundaries are more blurred like JLT/DMCC.
Thanks GAV - this is what i was trying to figure out if the Executive Regulations have been completed/released. I guess it's a waiting game for now
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