Extraction of peat

Excluded · 9% taxable

Forensic Analysis

DZ requiredSubstance: HIGHAI-derived

Extraction of natural resources is explicitly categorized as an Excluded Activity for Qualifying Free Zone Persons. While the entity may be exempt from Federal Corporate Tax under Article 7 (Extractive Business), this is contingent upon being subject to Emirate-level taxation. If the entity operates within a Free Zone and seeks the 0% rate, this activity fails the 'Qualifying Activity' test, defaulting the income to the 9% rate unless the Article 7 sovereign exemption is strictly proven.

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Legal Reference

Article 7 of Federal Decree-Law No. 47 of 2022 and Ministerial Decision No. 229 of 2025

Audit Red Flag

Attempting to recharacterize 'Extraction' as 'Manufacturing' or 'Wholesale of Peat' to claim Qualifying Income status under the Free Zone regime.

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