Mining of lignite

Mining of lignite is classified as an Extractive Activity. Under the UAE Corporate Tax framework, income from Extractive Business is generally subject to Emirate-level taxation and is explicitly categorized as an Excluded Activity for Qualifying Free Zone Persons. Forensic auditors will verify if the entity is attempting to claim the 0% rate on income that should be taxed at the Emirate level or the standard 9% rate if conducted within a Free Zone without meeting the de minimis requirements.

Audit Red Flag

Attempting to recharacterize extraction income as 'distribution' or 'logistics' to qualify for the 0% Free Zone regime.

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