Water collection, treatment and supply

Income derived from the extraction of groundwater is generally excluded from Corporate Tax as it falls under Sovereign/Emirate-level taxation. However, desalination and purification services provided to Free Zone Persons may qualify. Supply to Mainland UAE or non-Designated Zone areas will trigger the 9% rate on that specific revenue stream.

Audit Red Flag

Misclassification of 'Natural Resource Extraction' (Excluded/Emirate-level tax) as 'Water Treatment' (Qualifying Activity) to exploit the 0% regime.

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