Social work activities without accommodation for the elderly and disabled

ISIC 881 activities are primarily provided to natural persons. Under the UAE Corporate Tax regime for Free Zone Persons, services provided to natural persons are categorized as 'Excluded Activities' (unless specifically exempted like certain education/healthcare). Consequently, income from these activities is subject to the 9% rate if the de minimis limit is exceeded, or it may disqualify the entity from being a Qualifying Free Zone Person if not properly ring-fenced.

Audit Red Flag

Misclassification of B2C social service fees as B2B 'management consultancy' to circumvent the 5% de minimis threshold for Excluded Activities.

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