UAE Corporate Income Tax - Free Zone Public Consultation for Qualifying Activities and Excluded Activities

The UAE Ministry of Finance issued a Free Zone Public Consultation on 19 July 2023 with the aim of gathering views from interested parties on the proposed framework for the classification of Qualifying Activities and Excluded Activities for Free Zone companies.

Under the new Corporate Income Tax (CIT) regime, Qualifying Free Zone Persons can benefit from a 0% tax rate, provided they perform Qualifying Activities, not being regarded Excluded Activities, and if various other conditions are met (read our alert here).

On 1 June 2023, the Ministerial Decision No. (139) of 2023 was published providing details on what constitutes Qualifying Activities and Excluded Activities. The current Public Consultation is intended to obtain input from interested parties on the mentioned activities. The Public Consultation form can be found here. Responses to the Public Consultation must be submitted through the digital form before or on 2 August 2023. The Public Consultation’s digital form also includes various examples of the respective Qualifying Activities and Excluded Activities for interested parties to consider when submitting responses.

Whilst the Ministry of Finance clearly indicate that the information provided in the Public Consultation does not constitute tax, legal or any other professional advice, the examples may be considered quite helpful for specific business cases.

DLA Piper will provide comprehensive input on the Public Consultation. Our tax specialists are also working with several clients to review and provide input on their submissions. Please do not hesitate to reach out if you are considering providing feedback on the Public Consultation, or if you would like to contribute to DLA Piper’s submission.

Conclusion

Interested parties have until 2 August 2023 to provide input on a Public Consultation regarding Free Zone companies’ Qualifying Activities and Excluded Activities.