Alert UAE Corporate Tax 

Cabinet Decision No. 55 of 2023 and Ministerial Decision No. 139 of 2023 prescribing conditions for taxability of Free Zone Persons

Qualifying income

Certain revenue shall not be included in the calculation of non-qualifying Revenue and total Revenue which includes revenue attributable to certain

immovable property located in a Free Zone, revenue attributable to a Domestic Permanent Establishment or a Foreign Permanent Establishment.

Adequate substance (linkage with the Economic Substance Regulations)

• Core income generating activities shall be undertaken in the Free Zone.
• Having adequacy of the assets, qualifying employees and operating expenditure (commensurate to the activities carried out by FZP).
• Outsourcing of activities to a third party or related party provided adequate supervision is maintained by the FZP.

Deemed taxability (at the rate of 9%)

• Income attributable to immoveable property located in Free Zone (except for transactions by a FZP with a FZP for commercial property located in the Free Zone).
• Income attributable to Domestic Permanent Establishment (‘PE’) or a Foreign PE of a FZP
  
  

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 Alert UAE Corporate Tax 11 June 2023