How is taxability determined when a Free Zone Person transacts with another Free Zone Person?
Taxability of transaction amongst freezone persons are bifurcated into following 2 scenarios:
- Transactions in relation to excluded activities:
If a Qualifying Free Zone Person derives income in relation to Excluded Activities from other Free Zone Persons who are the Beneficial Recipients of those services and Goods, the resultant income will be taxed at 9% Corporate Tax rate.
- Transactions in relation to other than excluded activities:
If a Qualifying Free Zone Person derives income in relation to other than Excluded Activities from other Free Zone Persons who are the Beneficial Recipients of those services and Goods, the QFZP can benefit from the 0% Corporate Tax rate on such income.