Tax desk
The 0% rate, tested against your actual transactions
Being in a free zone does not give you the 0% rate. Qualifying for it does, transaction by transaction, and one category of income can put the whole period on 9%.
- Qualifying rate
- 0%
- If you fail
- 9% on all income
- Tested
- Every tax period
What it covers
What the engagement covers
The de minimis threshold is the trap. Non-qualifying revenue above it does not cost you that income, it costs you the rate on everything.
Ask what applies to you- Qualifying free zone person testing
- Qualifying income analysis by revenue stream
- De minimis threshold monitoring
- Substance and core income-generating activity
- Mainland transaction treatment
- Written position for the audit file
Who it is for
Three situations this is built for
-
Free zone companies with mainland sales
The single most common way the rate is lost.
-
Holding and IP structures
Income categories where qualifying status turns on the detail.
-
Anyone relying on 0% in a forecast
A rate assumed in a model that has never been tested.
How it runs
Three stages, start to finished
-
Review
Revenue mapping
Every stream split into qualifying, excluded and non-qualifying, with the reasoning written.
-
Work
Threshold test
Non-qualifying revenue measured against the de minimis limit for the period.
-
Close
Position paper
A written conclusion you can hand to an auditor, kept with the working papers.
Not included
What the fee does not cover
Listed because a scope is only clear when both halves are written down. Each of these is available; none is assumed.
- Free zone licensing or renewals
- Restructuring to restore qualifying status
- Transfer pricing files for group transactions
- Substance staffing or office arrangements
Questions we get
Answered plainly.
Not automatically. Some mainland revenue is excluded rather than fatal, and small amounts fall within the de minimis threshold. What matters is the category of income and the total, which is why it is tested per period.
Yes, every period. Qualifying status is not a registration you hold; it is a test you pass or fail on that period's transactions, and one new customer can change the answer.
Same desk
Also under Tax & Compliance Advisory
Talk to the tax desk
Send us your revenue by customer type.
We will tell you whether the 0% rate holds for the period, and what would break it if anything changed.