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DUBAI | ABU DHABI | RAS AL KHAIMAH
Ans. The Free Zone Corporate Tax regime is a form of UAE Corporate Tax relief which enables Free Zone companies and branches that meet certain conditions to benefit from a preferential 0% Corporate Tax rate on income from qualifying activities and transactions.
Ans. The benefits of the Free Zone Corporate Tax regime expire by no later than the end of the tax incentive period stated in the legislation of the relevant Free Zone, unless such period is extended by means of a Cabinet Decision issued in accordance with Article 18 of the Corporate Tax Law.
Ans. Where the revenues derived from performing Excluded Activities exceed the de minimis threshold this will result in a disqualification of the Qualifying Free Zone Person from the Free Zone Corporate Tax regime
Ans No. The AED 375,000 zero tax band does not apply to the income of a Qualifying Free Zone Person that is subject to the 9% Corporate Tax rate. A Free Zone Person that is not a Qualifying Free Zone Person will be able to benefit from the AED 375,000 zero tax band.
Ans. Where a mixed-use property such as a residential building with retail space generates both Qualifying and non-Qualifying Income, the Qualifying Free Zone Person must attribute and apportion income and expenditure between both types of income, and maintain relevant transfer pricing documentation and other records to support such allocations. Certain income and expenditure may be directly attributable, whereas other income and expenditure may need to be apportioned on a fair and reasonable basis in accordance with the arm's length principle.