Qualifying income is income that a Qualifying Free Zone Person (QFZP) can subject to a 0% corporate tax rate under UAE Federal Decree-Law No. 47 of 2022. For free zone businesses meeting all QFZP conditions, qualifying income is exempt from the standard 9% corporate tax rate.
Income from transactions with other free zone persons; income from eligible activities conducted with non-free zone persons (certain financial services, fund management, holding activities, logistics); and income from qualifying activities as defined by UAE Ministry of Finance Ministerial Decisions.
Income from UAE mainland customers (outside specified circumstances), income from domestic permanent establishments, and certain interest income. These are taxed at 9%.
Maintain adequate UAE substance, prepare audited financial statements, do not elect to be treated as a normal taxable person, and keep non-qualifying income below the de minimis threshold (5% of total revenue or AED 5 million, whichever is lower).
Finanshels structures income correctly, maintains required accounting records, and ensures annual corporate tax returns correctly reflect QFZP status. See our corporate tax services.
