UAE clarification of Freezone Qualifying Income
- Thread starter joffreylol
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They probably will go for income tax. I think that they believe Dubai and the UAE is such a great place that it's worth it to pay taxes there. Although I don't understand why would someone pay income tax in a state where you don't have public schools, public healthcare nor pensions. At least for the next couple of years there are options to mitigate this damage but who knows what happens next..
How far into the future can they see? ;-)
If they already say it with a limitation like that, it's guaranteed to happen.
If they already say it with a limitation like that, it's guaranteed to happen.
So is there anything clear and guaranteed now or is it speculation based on yet another online article of newspaper?
So according to those official documents, if you don't have income from qualifying activities, it means you don't have qualifying income, so your income will be taxed.
Qualifying Activities: manufacturing, processing, holding of shares and securities, ownership and operation of ships, reinsurance services, fund management services, wealth and investment management services, headquarter services to related parties, treasury and financing services to related parties, financing and leasing of aircraft, distribution of goods or materials in/from a designated zone, logistics services, and activities ancillary to the aforementioned activities.
Qualifying Activities: manufacturing, processing, holding of shares and securities, ownership and operation of ships, reinsurance services, fund management services, wealth and investment management services, headquarter services to related parties, treasury and financing services to related parties, financing and leasing of aircraft, distribution of goods or materials in/from a designated zone, logistics services, and activities ancillary to the aforementioned activities.
Yes see earlier in the thread
Interestingly -So it’ll need to be 15 percent ?
https://www.reuters.com/world/middl...coincides with,and make tax avoidance harder.
The UAE tax coincides with a new global︀ minimum corporate tax from the Organisation for Economic Cooperation and Development (OECD), signed by 136︁ signatories including the UAE, to ensure big companies pay a minimum 15% and make tax︂ avoidance harder.
Interestingly -So it’ll need to be 15 percent ?
https://www.reuters.com/world/middl...coincides with,and make tax avoidance harder.
The UAE tax coincides with a new global︀ minimum corporate tax from the Organisation for Economic Cooperation and Development (OECD), signed by 136︁ signatories including the UAE, to ensure big companies pay a minimum 15% and make tax︂ avoidance harder.
Guys,
you see that they are talking all the time about Freezones making Business within the UAE? Either from Freezone to Freezone or within a Freezone - designated Freezone?
They ignore entirely the origin definition of a Freezone - a Company being located in a separate Freezone doing international business.
There is no single word about International Business - they mention only Business Activities happening locally in the UAE - hence the weird list of activities provided and nothing about modern Business Activities like E-Commerce, Marketing or Consulting.
We don't know yet - if they did forget to mention this or they didn't mention this for a reason.
A request to PwC through a Corporate Entity with 350+ Employees was︀ sent earlier today and we read in the CC.
Expect further clarification after the weekend.︁
Yes - we see all your messages and Yes - everyone gets a response however︂ we need to set priority to our own clients first.
Have a great weekend and︃ don't take it too serious!
you see that they are talking all the time about Freezones making Business within the UAE? Either from Freezone to Freezone or within a Freezone - designated Freezone?
They ignore entirely the origin definition of a Freezone - a Company being located in a separate Freezone doing international business.
There is no single word about International Business - they mention only Business Activities happening locally in the UAE - hence the weird list of activities provided and nothing about modern Business Activities like E-Commerce, Marketing or Consulting.
We don't know yet - if they did forget to mention this or they didn't mention this for a reason.
A request to PwC through a Corporate Entity with 350+ Employees was︀ sent earlier today and we read in the CC.
Expect further clarification after the weekend.︁
Yes - we see all your messages and Yes - everyone gets a response however︂ we need to set priority to our own clients first.
Have a great weekend and︃ don't take it too serious!
Fred, thank you for taking︅ the time.
We'll wait for your report.
PS. In the meantime, this is a friendly︆ reminder that OECD employees are tax-exempt, but yet push for OTHERS, except them, to pay︇ taxes! This is ANALogous to people pushing gender mutilation laws while they remain exempt from︈ such laws.
We'll wait for your report.
PS. In the meantime, this is a friendly︆ reminder that OECD employees are tax-exempt, but yet push for OTHERS, except them, to pay︇ taxes! This is ANALogous to people pushing gender mutilation laws while they remain exempt from︈ such laws.
a. Income derived from transactions︅ with other Free Zone Persons, except for income derived from Excluded Activities.
b. Income derived︆ from transactions with a Non-Free Zone Person, but only in respect of Qualifying Activities that︇ are not Excluded Activities.
The a and b above are “qualifying” it goes on to︈ say “non free zone person” to be anyone/anything other so it should include any company︉ anywhere.
However;
Under A. Freezone to freezone is exempt. Surely they must have an anti︊ avoidance rule somewhere. Otherwise freezone A received all the money from abroad and needs to︋ declare this revenue . But then receives invoices from freezone B. Thereby reducing the profit.︌ Yet for freezone b it’s qualifying .
b. Income derived︆ from transactions with a Non-Free Zone Person, but only in respect of Qualifying Activities that︇ are not Excluded Activities.
The a and b above are “qualifying” it goes on to︈ say “non free zone person” to be anyone/anything other so it should include any company︉ anywhere.
However;
Under A. Freezone to freezone is exempt. Surely they must have an anti︊ avoidance rule somewhere. Otherwise freezone A received all the money from abroad and needs to︋ declare this revenue . But then receives invoices from freezone B. Thereby reducing the profit.︌ Yet for freezone b it’s qualifying .
The origin definition of Freezone is a designated area, usually physically separated, where they receive tax benefits.
Doing international business shifting away revenue into tax havens is a thing of the past. UAE just killed the business model of free zones and the business around it. Without tax benefits, there's no reason why IFZA should exist. They are not even physically separated from the mainland.
In that form, UAE is getting way less competitive. Mandatory audits, high license fees︀ and other useless fees in addition to taxes, are a tough pill to swallow. It︁ looks like the outside pressure is just too high, because overall this is a bad︂ deal.
However, clarification for many points is still required and it will take some time︃ until everything is black and white.
Doing international business shifting away revenue into tax havens is a thing of the past. UAE just killed the business model of free zones and the business around it. Without tax benefits, there's no reason why IFZA should exist. They are not even physically separated from the mainland.
In that form, UAE is getting way less competitive. Mandatory audits, high license fees︀ and other useless fees in addition to taxes, are a tough pill to swallow. It︁ looks like the outside pressure is just too high, because overall this is a bad︂ deal.
However, clarification for many points is still required and it will take some time︃ until everything is black and white.
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