Sovereign Verdict
MIXED
Statutory ISIC
0163
Regulatory Activity Scope
Post-harvest crop activities
"Under the framework reinforced by Ministerial Decision No. 229 of 2025, post-harvest activities (ISIC 0163) are scrutinized to distinguish between 'Excluded' trading activities and 'Qualifying' processing. If the activity does not result in a new HS Code or significant value-add, it is treated as Trading. If the entity is not in a Designated Zone (DZ) or sells to end-consumers (B2C), the income is taxed at 9%. Forensic focus is on the 'substantiality' of the dehydration, polishing, or heat treatment processes."
Forensic Audit Red Flag
Misclassification of 'simple sorting and packaging' as 'Processing of Goods' to claim 0% tax, when the activity lacks the 'substantial transformation' required by the FTA.
Statutory Authority
Ministerial Decision No. 229 of 2025, Article 4 (Qualifying Activities) and Article 6 (Excluded Activities)
Nexus Requirement
Must be conducted within a UAE Designated Zone with a valid Industrial or Manufacturing license to qualify as 'Processing'.
2026 Substance Compliance
- Core Income Generating Activities (CIGA)
- Local Full-Time Employment Test
- Adequate Local OPEX