Renting and leasing of other machinery, equipment and tangible goods

ISIC 773 (excluding Aircraft and Ships) does not constitute a 'Qualifying Activity' under the Free Zone regime. Income from leasing general machinery or office equipment is treated as non-qualifying income. If such income exceeds the De Minimis threshold (5% of total revenue or AED 5,000,000), the entity loses its Qualifying Free Zone Person status entirely for the relevant tax period.

Audit Red Flag

Reclassification of 'Finance Leases' as 'Operating Leases' to circumvent the 'Financing and Leasing' excluded activity definition

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