#US FEDERAL TAX BRACKETS 2020 FREE#
Maintain adequate assets, adequate number of qualified employees, and incur an adequate amount of operating expenditures with regards to the level of activities in the Free Zone. Undertake its core income-generating activities in a Free Zone. To maintain adequate substance, a Qualifying Free Zone Person should: A mainland branch of a Qualifying Free Zone Person will therefore generally constitute a Domestic PE and be subject to CT at 9%. However, it will not disqualify the Free Zone Person from benefitting from a 0% CT rate on Qualifying Income, or be factored into the de minimis test (as above).įor the purposes of determining whether a Qualifying Free Zone Person has a Domestic PE, the normal PE rules of Article 14 of the CT Law shall apply. Income attributable to a Domestic PE should be calculated as if the establishment was a separate and independent person and shall be subject to CT at 9%.
The Decisions introduce the concept of a Domestic PE where a Qualifying Free Zone Person has a place of business or other form of presence outside the Free Zone in the State. Importantly, the de minimis provisions also state that where a Free Zone Person fails to meet any of the qualifying conditions set out in UAE CT Law and in these Decisions, they will be treated as a Taxable Person subject to 9% CT rate for a minimum of five years. It also includes revenue attributable to a Domestic Permanent Establishment or a Foreign Permanent Establishment. This includes revenue attributable to certain immovable property located in a Free Zone (non-commercial property, and commercial property where transactions are with Non-Free Zone Persons). Non-qualifying Revenue is revenue drive from Excluded Activities or activities that are not Qualifying Activities where the other party is a non-Free Zone Person.Ĭertain revenue shall not be included in the calculation of non-qualifying Revenue and total Revenue. The de minimis requirements will be satisfied where non-qualifying Revenue does not exceed 5% of total revenue or AED5,000,000, whichever is lower. Generally the listed excluded and qualifying activities shall have the meaning provided under the respective laws regulating these activities, unless otherwise prescribed. The distribution of goods in or from a designated zone subject to certain conditions. Headquarter and financing services to related parties įinancing and leasing of aircraft, logistics and Regulated reinsurance and fund /wealth management Manufacturing and processing of goods or materials Qualifying Activities include the following: Ownership or exploitation of immovable property, except for transactions with Free Zone Persons in relation to commercial property located in a Free Zone. Ownership or exploitation of intellectual property assets, and Regulated banking, finance, leasing and insurance activities
#US FEDERAL TAX BRACKETS 2020 PLUS#
Transactions with natural persons (subject to certain exceptions under Qualifying Activities related to shipping and aircrafts plus fund, wealth and investment management)
Income derived from transactions with a Non-Free Zone Person, but only in respect of " Qualifying Activities" that are not Excluded Activities.Īny other income provided that the QFZP satisfies the de minimis requirements.Įxcluded Activities include the following: Income derived from transactions with other Free Zone Persons, except for income derived from “ Excluded Activities”. One of the most awaited topics was the definition of “ Qualifying Income” which has now been clarified to include: The UAE CT Law states that a Qualifying Free Zone Person (“QFZP”) will be taxed at the following rates:ĩ% (nine percent) on Taxable Income that is not Qualifying Income.
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