Let us first understand the definition of Designated Zone:
The effect for businesses operating in Designated Zones will be that many supplies of goods will be outside the scope of UAE VAT, subject to strict criteria and detailed record keeping. However, supplies of services are subject to the normal UAE VAT rules.
To summarize the above:
(a) Goods under Customs suspension should be treated as, goods sold from designated zone & hence are generally in the category of "Out of Scope".
(b) Goods where custom duty is paid or, on purchase (from mainland) are not moved into custom suspension, are generally NOT treated as sales from Designated Zone & should be considered under "Export" of goods. This is a general rule, while adopting, other aligned factors should also be considered for implementation.
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