Free Zone Taxability Explained | UAE Corporate Tax

UAE Corporate Tax Law has been released on 9th December 2022. MCA has been releasing insights into the various key aspects of the new UAE Corporate Tax (CT) Law for the benefit of our clients. This snippet covers the topic “Free Zone Taxability Explained”. Much awaited clarity has now been provided on which incomes of a free zone entity / person would be considered as “Qualifying Income” subject to tax at 0%. A free zone entity, would be required to evaluate whether its income would be a qualifying income or other income. In case other income exceeds the de minimis threshold then such entity would not be eligible to claim benefit of 0% tax on Qualifying Income and entire income would be subject to tax at normal rates for five years. In light of this significant development, it would be advisable for a free zone entity / person to conduct an impact assessment of these clarification at the earliest.

Please find enclosed our note on the Free Zone Taxability.