The UAE government has made changes to the corporate tax clarifications that will impact the business environment and investment opportunities in the country.

His Excellency Younis Haji Al Khoury, Deputy Minister of Finance, emphasized the importance of free economic zones in attracting foreign direct investment and supporting the country’s economic growth. He also noted that these changes are intended to bring the UAE into line with international tax standards.

According to the new resolution of the Cabinet of Ministers, the types of qualifying free zone income have been expanded to include income received from the ownership or use of intellectual property.

The calculation of this income will be based on the methodology proposed by the Organization for Economic Cooperation and Development, which will provide more transparent and accurate calculations.

Additionally, the resolution notes that trade in qualified goods is also included as an activity for which a 0% corporate tax applies in free zones. This applies to trading of metals, minerals, energy and agricultural commodities traded on a recognized commodity exchange, as well as income from trading derivatives used to hedge the risk of such trading activities.

This ministerial decision also defines the scope of qualified and excluded activities to provide clarity and certainty to businesses operating in free zones.

These changes reaffirm the UAE’s ambition to become a leading global business and investment hub, strengthen the competitiveness of its corporate tax regime and create an enabling environment for sustainable economic development.

We will be happy to answer your questions and provide assistance with issues related to these changes. Contact us for further details.