Answer:
A Qualifying Free Zone Person (QFZP) is a Free Zone entity that meets all the statutory conditions required to benefit from the 0% Corporate Tax rate on certain types of income. (Article 18 of Federal Decree-Law No. 47 of 2022)
Qualification Criteria:
To be considered a QFZP, a Free Zone entity must:
• Maintain adequate substance in the UAE (e.g., assets, employees, expenses).
• Earn Qualifying Income as defined in Cabinet Decision No. 100 of 2023.
• Comply with transfer pricing rules (Article 34 and Article 55 of Federal Decree-Law No. 47 of 2022).
• Not elect to be subject to the standard 9% Corporate Tax.
• Meet any additional conditions set by the Minister (for example, Ministerial Decision No. 265 of 2023).
If any of these conditions are not met at any time during the Tax Period, the entity will cease to be treated as a QFZP from the start of that period.
Example:
A Free Zone company that:
• Owns shares in subsidiaries for at least 12 months,
• Provides treasury and headquarter services to its group companies located in the Free Zone,
• Maintains office premises and full-time staff in the Free Zone,
• Has no transaction...