Civil engineering (ISIC 42) is inherently linked to immovable property. Under the UAE Corporate Tax regime for Free Zone Persons, income derived from immovable property is categorized as Excluded Income, unless it is income from Commercial Property located in a Free Zone where the transaction is with another Free Zone Person. Since most civil engineering involves public infrastructure or mainland development, it fails the Qualifying Income test, subjecting the entity to the 9% statutory rate if the de minimis threshold is breached.
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Legal Reference
Ministerial Decision No. 229 of 2025, Article 3, Clause 1(g)
Audit Red Flag
Recharacterizing site-based civil engineering works as 'technical consultancy' or 'project management' to circumvent the immovable property exclusion.