UAE free zone businesses must check on eligibility for preferential 0% corporate tax

UAE free zone businesses must check on eligibility for preferential 0% corporate tax

Free zone companies must take an immediate notice of the updated frequently asked questions (FAQs) by the Ministry of Finance. Over 50 new Q&A have been added/updated on the free zone tax regime pursuant to the announcement made during the awareness sessions held last month. On the question of the list of free zones part of the preferential 0 per cent corporate tax rate, businesses are advised to contact their free zone authority to confirm the eligibility. On the question of the tenure, it has been clarified that the benefits of the preferential rate expire by the end of the tax incentive period stated in the legislation of the relevant free zone. Such period could be extended in accordance with relevant laws. The FAQs have also clarified that the preferential per cent rate is open to existing and newly established free zone companies and branches. Natural persons, unincorporated partnerships and sole establishments are not eligible for the preferential rate. There is no requirement for a Qualifying Free Zone Person (QFZP) to make a formal election or submit an application for the preferential rate - it will be applicable automatically if all the conditions are met. Qualifying income (QI) – subject