FREE Zone Corporate tax Regime
Entities established in a Free Zone that are Qualifying Free Zone Persons will be subject to UAE CT at the following rates:
* 0% on Qualifying Income.
* 9% on Taxable Income that does not meet the Qualifying Income definition.
To be treated as a “Qualifying Free Zone Person”, the Free Zone entity must:
- Maintain adequate substance in the UAE,
- Derive “Qualifying Income” as specified in a Cabinet Decision,
- Comply with transfer pricing rules and maintain the relevant transfer pricing documentation; and
- Not have made an election to be subject to CT in full.
A Qualifying Free Zone Person that meets the relevant conditions will be able to benefit from the 0% Free Zone CT regime automatically. However, a Qualifying Free Zone Person can elect not to apply the Free Zone CT regime, but instead be subject to the regular CT regime and rates.
All Free Zone entities will be required to register and file a CT return, irrespective of whether they are a Qualifying Free Zone Person or not.
