Corporate sponsorship income received by businesses operating in a free trade

zone in Dubai may be subject to taxation, including VAT and corporate income
tax, depending on the specific circumstances.
Under the UAE VAT regime, any supply of goods or services, including
sponsorship services, made within the UAE, may be subject to VAT if they meet
certain criteria, such as exceeding the minimum threshold for taxable supplies.
Therefore, if the sponsorship services provided by the business within the free
trade zone are considered taxable supplies and meet the VAT threshold, then the
business may be required to register for VAT and charge VAT on their
sponsorship income.
Furthermore, the taxability of corporate sponsorship income in a free trade zone
may also depend on the business structure and its tax residency status. For
instance, businesses incorporated in a free trade zone may enjoy tax exemptions
and incentives, but those outside the zone may be subject to UAE corporate
income tax.

Corporate sponsorship income received by businesses operating in Sharjah free

trade zone may be subject to taxation, including VAT and corporate income tax,
depending on the specific circumstances. Here are some of the tax obligations
and implications of corporate sponsorship income in Sharjah free trade zone:

VAT: If the sponsorship services provided by the business within the Sharjah free
trade zone are considered taxable supplies and meet the VAT threshold of AED
375,000 per year, then the business may be required to register for VAT and
charge VAT on their sponsorship income at the applicable rate of 5%.

Corporate income tax: Businesses operating within the Sharjah free trade zone
may enjoy tax exemptions and incentives, depending on the specific free zone
and its regulations. For example, businesses operating in the Sharjah Airport
International Free Zone (SAIF Zone) may enjoy a 100% corporate income tax
exemption for up to 50 years. However, businesses outside of the free zone may
be subject to UAE corporate income tax.

Withholding tax: If the corporate sponsorship income is paid to a non-resident

entity or individual, then it may be subject to withholding tax at a rate of 5%.
However, the withholding tax may be reduced or eliminated if there is a tax
treaty between the UAE and the country of the non-resident entity or individual.