On 2 October 2026, the Federal Tax Authority published Public Clarification TAXP010, “Free Zones and Designated Zones for Tax Purposes”. The clarification is useful for a number of reasons, but one point is particularly interesting for the Corporate Tax treatment of distribution activities: what exactly is the geographical area that qualifies as a “Designated Zone” for Corporate Tax purposes?
We raised this question in an earlier LinkedIn post following a webinar, using the slide reproduced below. The question was whether a Free Zone included in the Cabinet list of VAT Designated Zones could still qualify as a Designated Zone for Corporate Tax purposes where the relevant part of the Free Zone did not satisfy the conditions for being treated as outside the UAE for VAT purposes.
