The UAE Ministry of Finance has recently introduced new corporate tax decisions aimed at offering more clarity for free zone companies on eligible and ineligible activities for tax benefits. It determines qualifying income and focuses on qualifying activities and excluded activities. Qualifying activities deemed eligible for tax benefits encompasses sectors such as manufacturing, research and development, technology, and certain service industries while sectors such as banking, insurance, investment, and leasing activities are excluded and do not qualify for tax benefits. The decision also extends the scope of qualifying income to include income from qualifying intellectual property calculated based on the OECD’s modified nexus approach.
These decisions reinforces the UAE’s commitment to align with global tax standards, support economic diversification, and aims to assist companies in planning their finances effectively to reduce tax liabilities.
Interested to learn more about the recent developments about Corporate Tax in the UAE? Drop us an email (office@alphaprimewc.ae) or give us a call at (+97158 515 2374) at any time.
