The Complete Guide to Corporate Tax for Freezone Companies in the UAE

Author: CA Sachin R. Paniya | Category: Corporate Tax

The introduction of Corporate Tax in the UAE has fundamentally shifted the tax landscape. While Free Zone entities traditionally enjoyed tax exemption, the new regime introduces nuances that require careful navigation.

Qualifying vs. Non-Qualifying Income

To benefit from the 0% tax rate, a Free Zone Person must derive 'Qualifying Income'. This includes income from transactions with other Free Zone Persons and certain designated activities.

Compliance is Mandatory

Even if your Free Zone company generates 100% Qualifying Income and is subject to a 0% Corporate Tax rate, you are still required to register for Corporate Tax, file an annual return, and maintain audited financial statements.