HOW LOGISTICS QUALIFY IN FREE ZONES

Benefit applies even when services or goods are sold to non-free zone persons, with conditions

- BY SAMEER MISHRA Special to Gulf News

The UAE corporate tax law provides significant benefits for businesses operating in free zones.

The 0 per cent corporate tax rate under free zone provisions applies to transactions and activities conducted from within the prescribed geographical areas of free zones, including Designated Zones.

A Qualifying Free Zone Person (QFZP) can benefit from the 0 per cent corporate tax rate when it derives qualifying income from transactions involving specific qualifying activities. This benefit applies even when services or goods are sold to non-free zone persons, provided the income comes from qualifying activities.

QUALIFYING ACTIVITIES FOR FREE ZONE PERSONS

According to the UAE Federal Tax Authority (FTA), QFZPs can befit from the 0 per cent corporate tax rate when selling services or goods to non-free zone persons, as long as they derive qualifying income from qualifying activities.

These qualifying activities include manufacturing of goods or materials, processing of goods or materials, trading of qualifying commodities, holding of shares and other securities for investment purposes, ownership, management and operation of ships, reinsurance services, fund management services, wealth and investment management services, headquarter services to related parties, treasury and financing services to related parties, financing and leasing of aircraft, distribution of goods or materials in or from a Designated Zone, and logistics services.