Distilling, rectifying and blending of spirits

Under the Qualifying Free Zone Person (QFZP) regime, 'Manufacturing of goods or materials' is a Qualifying Activity. However, because spirits are subject to Excise Tax, the FTA will apply the 'Substantial Transformation' test. If the process is deemed mere 'blending' without significant chemical change or value-add, it may be disqualified from the 0% rate if sold to non-Free Zone persons.

Audit Red Flag

Misclassification of 'bottling and labeling' as 'manufacturing' when it lacks substantial transformation, leading to re-characterization as an Excluded Activity (Distribution of Excisable Goods).

Which UAE zones permit this activity?

Scout checks the current permission status for this activity across every UAE zone against your specific structure.