One of the benefits available to businesses operating in the free zone of a freeport is that they will be able to zero rate their supplies for VAT purposes. The measure creates an exit charge which is intended to ensure that business do not gain an unfair advantage, by ensuring that when goods leave a free zone and there is no onward supply of those goods within a certain period, VAT will be due. Other changes include amendments to warehousing rules and historic VAT rules in order to make them compatible with the new VAT free zone rules.
The government will also legislate to apply the penalty regime where breaches relating to excise goods occur in the free zone procedure or the authorised use procedure for registered consignors.
Businesses who will operate in the free zones of freeports.
Both measures will take effect from 3 November 2021.
These measures are part of the provisions in place to enable freeports to operate as intended and maintain fair competition.