Free Zone Person
Free Zone Person has been defined under the provisions the Corporate Tax Decree-Law, as a juridical person incorporated, established or otherwise registered in a Free Zone, including a branch of a Non-Resident Person registered in a Free Zone.
Free Zone
Free Zone has been defined under the provisions the Corporate Tax Decree-Law, as a designated and defined geographic area within the State that is specified in a Cabinet decision.
Qualifying Free Zone Person
Qualifying Free Zone Person has been defined under the provisions the Corporate Tax Decree-Law, A Free Zone Person that meets the conditions of Article 18 of the Corporate Tax Decree-Law and is subject to Corporate Tax under Clause 2 of Article 3 of the Corporate Tax Decree-Law.
Text of the of Article 18 of the Corporate Tax Decree-Law - Qualifying Free Zone Person
1. A Qualifying Free Zone Person is a Free Zone Person that meets all of the following conditions:
a) Maintains adequate substance in the State.
b) Derives Qualifying Income as specified in a decision issued by the Cabinet at the suggestion of the Minister.
c) Has not elected to be subject to Corporate Tax under Article 19 of this Decree-Law.
d) Complies with Articles 34 and 55 of this Decree-Law.
e) Meets any other conditions as may be prescribed by the Minister.
a) Maintains adequate substance in the State.
b) Derives Qualifying Income as specified in a decision issued by the Cabinet at the suggestion of the Minister.
c) Has not elected to be subject to Corporate Tax under Article 19 of this Decree-Law.
d) Complies with Articles 34 and 55 of this Decree-Law.
e) Meets any other conditions as may be prescribed by the Minister.
2. A Qualifying Free Zone Person that fails to meet any of the conditions under Clause 1 of this Article at any particular time during a Tax Period shall cease to be a Qualifying Free Zone Person from the beginning of that Tax Period.
3. Notwithstanding Clause 2 of this Article, the Minister may prescribe the conditions or circumstances under which a Person may continue to be a Qualifying Free Zone Person, or cease to be a Qualifying Free Zone Person from a different date.
4. The application of paragraph (a) of Clause 2 of Article 3 of this Decree-Law to a Qualifying Free Zone Person shall apply for the remainder of the tax incentive period stipulated in the applicable legislation of the Free Zone in which the Qualifying Free Zone Person is registered, which period may be extended in accordance with any conditions as may be determined in a decision issued by the Cabinet at the suggestion of the Minister, but any one period shall not exceed (50) fifty years.
Rate of the Corporate Tax imposed on a Qualifying Free Zone Person
0% (zero percent) on Qualifying Income.
9% (nine percent) on Taxable Income that is not Qualifying Income under Article 18 of the Corporate Tax Decree-Law and a Cabinet Decision issued under the Corporate Tax Decree-Law.
What is Qualifying Income ?
Qualifying Income has been defined under the provisions the Corporate Tax Decree-Law, as any income derived by a Qualifying Free Zone Person that is subject to Corporate Tax at the rate specified in paragraph (a) of Clause 2 of Article 3 of this Decree-Law.
