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United Arab EmiratesVAT & Corporate TaxUpdated: Sep 13, 2026
Validation Pending: The capabilities described for United Arab Emirates are currently under review. Prefiler does not yet offer production-validated automated pre-filing intelligence for this jurisdiction.
Direct Answer
Free Zone Persons can benefit from 0% Corporate Tax only on "Qualifying Income". This requires separating income derived from transactions with other Free Zone Persons, or from "Qualifying Activities", while excluding Excluded Activities like retail sales or IP ownership.
The 0% Tax Threshold
Being registered in a Free Zone (e.g., DMCC, JAFZA) no longer guarantees zero tax. You must meet the "Qualifying Free Zone Person" criteria and maintain adequate substance.
Revenue Segregation
During accounting, you must tag every invoice and bank receipt as:
- Qualifying Income (0%): B2B services with other Free Zone entities, or specific qualifying activities like manufacturing or logistics.
- Non-Qualifying Income (9%): Sales to mainland UAE consumers, or real estate income from non-commercial mainland property.
If non-qualifying revenue exceeds 5% of total revenue or 5,000,000 AED, you lose the 0% benefit for the entire entity.