Corporate Tax Impacts on Freezone - Mainland Income - CALX International Auditing of Accounts

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Corporate Tax Impact on Freezones Following incomes earned by Freezones will not be subject to UAE corporate tax (or will be taxed at 0%) Incomes earned by freezone companies by providing good/services to businesses in the same freezone Incomes earned by freezone companies by providing good/services to businesses in the any other UAE freezone Incomes earned by freezone companies from businesses situated outside the UAE i.e. exports of goods or services For a business situated in designated zone the income earned from sales to good to mainland businesses where the mainland business is importer of record Transactions done with branches or group companies in mainland. Passive income earned from mainland (interests, royalties, dividends, capital gains) Corporate Tax Impact on Freezones However, a mainland sourced active income earned by a freezone company not only will be taxable but also will disqualify the 0% status on all incomes earned by such freezones company. Another important consideration in this regard is that the aforementioned freezone company incomes are taxable at 0% and not out of scope that means such companies still need to register and disclose the incomes earned. It is understood based on information available so far that incomes earned by mainland business from freezone companies may be subject to freezone. Income earned by freezone companies by sale of goods or services that are consumed within the same freezones may be subject to CT at regular rates (Restaurants, supermarkets etc.)