We know that all business licenses registered under the UAE authority should register for corporate tax, irrespective of their income levels, and the corporate tax rate is 9% for the taxable profit which is above AED 375,000/-.
Still free zone companies have the privilege to claim the 0% tax rate subject to certain conditions.
Do you know how??
Now, let us discuss on the requirements for a free zone company to qualify for the 0% corporate tax.
- UAE free Zone companies must have adequate substance in the UAE.
- UAE Free Zone companies must receive Qualifying Income.
- UAE Free Zone companies must not elect 9% voluntarily. All Free zone companies have the option to pay 9% corporate tax voluntarily. In order to be eligible for 0% corporate tax, a UAE Free Zone Company must not be elected 9% voluntarily.
- Arm's Length Pricing and Transfer Pricing Documentation. In case if UAE company is dealing with any related party or associated enterprises the transactions between the companies must be at "Arm's length Pricing" and the company must have a "Transfer Pricing Document" which will justify the transactions.
- Audited financial statement for the free zone company is mandatory while claiming for 0% Corporate Tax benefit.
However, to get more details regarding the 0% tax benefit contact us on the below email id.
To learn more about Does your Free Zone Company qualify for the 0% Corporate Tax???, book a free consultation with one of the Flyingcolour team advisors.
Disclaimer: The information provided in this blog is based on our understanding of current tax laws and regulations. It is intended for general informational purposes only and does not constitute professional tax advice, consultation, or representation. The author and publisher are not responsible for any errors or omissions, or for any actions taken based on the information contained in this blog.