UAE CT: Excluded Activities of Qualifying Free Zone Person I CT on free zone banks, insurance etc.

The QFZP's revenue generated from excluded activities is classified as non-qualifying revenue and is considered for de-minimis purposes, unless the revenue is exempt or falls under four standard-rated revenue categories. The Guide provides additional details along with examples related to the classification of revenue and de-minimus application.
The revenue derived by the QFZP from natural persons such as sole proprietors, unincorporated partnerships, freelancers, and individuals, regardless of their location, is classified as non-qualifying revenue. However, the regulated fund management, wealth management, and investment management services offered to any person regardless of their location are considered qualifying activities. Additionally, engaging in the ownership, management, and operation of ships, as well as providing financing and leasing services for aircraft, including engines and rotable components, provided to any person irrespective of their location, are also regarded as qualifying activities. Few of these activities have been illustrated with examples in the guide.
The revenue generated by the QFZP from the regulated financial activities (banking business), falls under the excluded activities, but the regulated fund, wealth and investment management services or treasury and financing services to related parties if performed on standalone basis, are considered qualifying activities, irrespective of the geographical location of the customers.
Regulated insurance services provided by the QFZP, involving the acceptance of risks through insurance contracts in both life and non-life sectors, excluding reinsurance and captive insurance, are considered excluded activities. On the other hand, reinsurance services and captive insurance activities, where headquarters services are offered to affiliated entities, are classified as qualifying activities. Captive insurance refers to a form of self-insurance in which a company (or group of companies) creates its own insurance company to provide coverage for its own risks; and the same has been explain along with example in the guide.
The regulated offering of credit or financing for any form of consideration as well as the leasing, renting, or granting of the right to use an asset in return for rent or other consideration, are classified as excluded activities. However, financing and leasing of ships, financing services provided to related parties (as related party financing is not considered a regulated activity in the UAE), and financing and leasing of aircraft, including engines and rotables are qualifying activities. These distinctions are detailed in the Guide, accompanied by examples.
Revenue derived from immovable commercial property located in the free zone, not used for accommodation purposes, and involving transactions with free zone persons, is considered a qualifying activity. However, revenue from any other immovable property is deemed non-qualifying revenue and will be taxed at nine percent without being factored into the de minimis calculation. Revenue from hotels, serviced apartments, and residential properties will be classified as standard-rated non-qualifying revenue.
Except for the qualifying revenue of QFZP derived from qualifying intellectual property and computed using a specific formula, all other revenue arising from intellectual property assets will be categorized as standard rated excluded activities. Section nine of the Guide addresses this matter.
If the QFZP participates in any ancillary activities to bolster the primary activities (dependent activities), any revenue from these activities will be treated in the same manner as the primary activity.