A Qualifying Free Zone Person within a Free Zone can enjoy a favorable Corporate Tax rate of 0% exclusively on their “Qualifying Income.”
To qualify as a Qualifying Free Zone Person, the individual or entity must fulfill the following criteria:
- Maintain sufficient substance in the UAE.
- Generate ‘Qualifying Income.’
- Refrain from opting to be subject to Corporate Tax at the standard rates.
- Comply with the transfer pricing requirements stipulated under the Corporate Tax Law.
The Minister has the authority to impose additional conditions that a Qualifying Free Zone Person must adhere to.
If a Qualifying Free Zone Person fails to meet any of these conditions or voluntarily chooses to be governed by the regular Corporate Tax regime, they will be liable for the standard rates of Corporate Tax starting from the Tax Period in which the conditions were not met.
