Monetary intermediation

Monetary intermediation is explicitly defined as an Excluded Activity under the UAE Corporate Tax regime for Free Zone Persons. Income from banking and deposit-taking activities is subject to the 9% statutory rate. Forensic focus is on the 'substance over form' of transaction flows to ensure interest-bearing activities are not masked as qualifying service income.

Audit Red Flag

Reclassification of interest margins or spread-based income as 'management fees' or 'advisory services' to circumvent the Excluded Activity status.

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