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UAE Corporate Tax – Qualifying Free Zone


qualifying free zone


Corporate Tax on Free zone Business- Qualifying & Non qualifying, (Cabinet Decision no. 55 & Ministerial Decision no. 139)

qualifying free zone


Corporate Tax on Free zone – Qualifying Activities (CD 55 & MD 139)

Qualifying Activities:


  • Manufacturing  of Goods or materials (PCD: Fully fledged & Contract/ toll manufacturing)
  • Processing  of Goods or materials
  • Distribution of imported goods or materials in or from a Designated Zone to reseller


Services & Others:

  • Holding of shares and other securities
  • 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, including engines and rotable components
  • Logistics services
  • Ancillary activities to above

* Subject to the respective UAE regulatory authority oversight


Corporate Tax on Free zone – Excluded Activities (CD 55 & MD 139)

Excluded Activities (Non-qualifying revenue)

  • Transaction with Natural Person (except to Ownership or management of ship/ Fund management services/ Wealth & investment management/ Financing & leasing of aircraft)
  • Banking activities
  • Insurance activities (other than reinsurance)
  • Financing and leasing activities, except 1) Financing to related parties & 2) Related to aircraft
  • Ownership or exploitation of immovable property, except the transaction with another free zone person related to immovable commercial property in free zone
  • Intellectual property assets income
  • Ancillary activities to above


Corporate Tax on Free Zone Business – Qualifying & Non Qualifying – De Minimis Requirement

One of the condition for Qualifying Free Zone Persons (QFZP) is to satisfy De MinimisRequirement, for which Non-Qualifying Revenue should not exceed below limits.

qualifying free zone


Qualifying Free Zone (QFZ) Taxability

qualifying free zone


Qualifying Free Zone (QFZ) Taxability

qualifying free zone



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Why Spectrum Auditing?

Being a pioneer in the field of auditing, accounting, taxation and advisory services, we ensure we keep track of all the changes that are taking place in the UAE with respect to the changes in laws, rules, regulations and keep our clients informed as well as sharing the same information through our blog section or social media handles regularly. Spectrum Auditing will guide you with the laws and regulations of UAE, be it the Risk Advisory, Transfer Pricing, Value Added Tax (VAT),  Economic Substance Regulations (ESR), Corporate Tax (CT), Transfer Pricing (TP), Ultimate Beneficiary Owner (UBO), Anti Money Laundering (AML), etc  after reviewing your business.


Call us today for any kind of assistance at +971 4 2699329  or email [email protected] to get all your queries addressed. Spectrum is your partner in your success.



Balaram Vuchidi

Managing Director
+971 50 9866 466
[email protected]
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