Jan 31, 2022 
Taxes
UAE Corporate Tax – Income exempt, foreign person, free zones info
UAE Ministry of Finance has announced the introduction of corporate tax on business profits which will be effective from financial year starting from June 1, 2023. Here are the details being published in a series of articles.
Income exempt from CT
Q) Will any income be exempt from UAE CT?
Dividends and capital gains earned by a UAE business from its qualifying shareholdings will be exempt from UAE CT.
Q) What is a ‘qualifying’ shareholding?
A qualifying shareholding refers to an ownership interest in a UAE or foreign company that meets certain conditions to be specified in the UAE CT law.
Q) Will intra-group transactions be exempt from UAE CT?
Qualifying intra-group transactions and reorganizations will not be subject to UAE CT provided the necessary conditions are met.
Foreign persons
Q) Will a foreign company or individual be subject to UAE CT?
Foreign entities and individuals will be subject to UAE CT only if they conduct a trade or business in the UAE in an ongoing or regular manner.
Q) Will income earned by a foreign investor be subject to UAE CT?
UAE CT will generally not be levied on a foreign investor’s income from dividends, capital gains, interest, royalties and other investment returns.
Free zones
Q) Will a free zone business be subject to UAE CT?
Free zone businesses will be subject to UAE CT, but the UAE CT regime will continue to honour the CT incentives currently being offered to free zone businesses that comply with all regulatory requirements and that do not conduct business with mainland UAE.
Q) Will a free zone business be required to register and file a CT return?
A business established in a free zone will be required to register and file a CT return. Further details on the compliance obligations of free zone businesses will be provided in due course.
Q) Will the
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