Headquarter services tax-exempt in the UAE?

JustAnotherNomad · 2025-03-06T14:23:21+0100

I found @Don's comment here very interesting:

Post in thread 'Iran for doing business tax free'

Nov 5, 2024

ecool said:
Is this 20-year tax exemption the same as the 50-year tax exemption promised by UAE freezones?

It's not exactly the same. Nowadays, in the UAE, rather limited activities are exempt from tax (also referred to as qualifying activities), so in Iran the scope is broader.

However, you can still have your UAE entity provide headquarters services (tax-free in the UAE) to affiliated entities, e.g., in Iran.

To do business globally with an Iranian company, you might need to have intermediary entities in other jurisdictions.

Indeed it seems like "Headquarter services to Related Parties" are on the list of "qualifying" (tax-exempt) activities.
Does anyone have more insight how this is defined?

Say you are an SEO agency.
You have sales offices (local subsidiaries) in different high-tax countries that simply resell the services of the UAE company.
Could this be seen as "headquarter services to related parties"? I guess not if the actual SEO marketing is done from the UAE (SEO marketing is not a qualifying activity and the company needs to have 95%+ qualifying activities to get the tax-free status).
But what if the UAE company subcontracts the actual SEO marketing work to firms in India and Pakistan? So all the UAE company is does is coordinate the work between the sales offices and the partner firms? Could that be headquarter services?

DSoz · 2025-03-06T17:23:18+0100

This is quite interesting and might be a good way to solve the complex issue of PE with other UAE companies if you have a US LLC for example

JustAnotherNomad · 2025-03-06T18:59:50+0100

Here's the official definition:

Headquarter services to Related Parties includes the administering, overseeing and managing of
Business Activities of Related Parties, including the provision of senior and general management,
captive insurance services, administrative services, procurement services, business planning and
development, risk management, coordination of group activities, and in general incurring
expenditures on behalf of Related Parties and providing other support services to Related Parties.

Source: https://mof.gov.ae/wp-content/uploa...ifying-Activities-and-Excluded-Activities.pdf

Headquarter services tax-exempt in the UAE?

JustAnotherNomad

Post in thread 'Iran for doing business tax free'

DSoz

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