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BI CFO / UAE / Free zone 0% check

Free zone 0% check

The de minimis test and the conditions to keep the 0% rate as a Qualifying Free Zone Person.

For example sales to mainland customers that do not qualify

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Common questions

What is the de minimis test?

Non-qualifying revenue must not exceed the lower of 5% of total revenue or AED 5 million in the tax period.

What else must a Qualifying Free Zone Person do?

Keep adequate substance in the free zone, earn qualifying income from qualifying activities, not elect for standard taxation, follow transfer pricing rules and prepare audited financial statements.

What happens if we fail?

The company is taxed at the standard rates for that period and the following four tax periods.

For education only. Qualifying activities, excluded activities and immovable property rules are not modelled. Not tax advice.

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