UAE Ministry of Finance provides further clarity on Free Zone Tax Regime in Public Consultation

In recent weeks, there have been significant developments to the UAE’s corporate tax landscape. On 1 June 2023, the UAE witnessed the introduction of a Corporate Income Tax (CIT) for financial years starting on or after this date. Particularly noteworthy is the ‘Free Zone Tax Regime’ applicable to juridical persons incorporated, established or registered within the Free Zone. Under the Free Zone tax regime, Qualifying Free Zone Persons can benefit from a 0% tax rate on ‘Qualifying Income’. The UAE Cabinet and the Minister of Finance further released two critical decisions on 1 June 2023, which provided further clarity on what constitute ‘Qualifying Activities’ and ‘Excluded Activities’ for businesses in the Free Zones.