Corporate tax: UAE exempts free zones from business tax

Corporate tax: UAE exempts free zones from business tax

UAE has rolled out its corporate tax, with businesses operating in free zones exempted from the 9 per cent business tax to further promote the country’s attractiveness in strategic sectors. The Ministry of Finance said qualifying entities in the country’s economic free zones – which export tens of billions of dollars of goods to neighbouring states – will be subject to a 0 per cent rate, even when dealing with the mainland on certain strategic activities such as manufacturing, goods processing and logistics services. “The Free Zone Corporate Tax regime applies to ‘Free Zone Persons’, which refers to a juridical person that is incorporated or otherwise formed or registered in a Free Zone,” the ministry said post the media briefing. The free zone corporate tax regime is applicable only within the prescribed free zones and the ministry urged businesses to contact the Free Zone Authority to confirm whether the free zones they operate from are eligible for the 0 per cent rate. “The regime has been designed to ensure strategic sectors will thrive in the free zones. Some level of migration may happen but the overall objective is ensuring the UAE remains attractive,” Shabana Begum, executive director of – tax