Retail sale of information and communications equipment in specialized stores

Retail activities are explicitly categorized as Excluded Activities under the UAE Corporate Tax regime for Free Zone Persons. Income derived from the retail sale of ICT equipment to natural persons or non-Free Zone entities fails the Qualifying Income test. If such excluded revenue exceeds the De Minimis threshold (5% of total revenue or AED 5 million), the entity risks losing its Qualifying Free Zone Person status entirely.

Audit Red Flag

Misclassification of B2C retail transactions as B2B 'Distribution of Goods' to circumvent the 9% tax rate.

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