Page 8 - ICAI UAE TAX UPDATE_MAY 2024

Ownership, operation and management of ships: The and financing services will be treated as Qualifying
use of Ships in offshore oilfield and maritime services, Income from a Qualifying Activity.
involving such operations as oil drilling, seismic surveys,
and related services typically associated with oilfield Financing and leasing of Aircraft: An Aircraft refers to
support and offshore vessels, are within the scope of any machine that can derive support in the atmosphere
ownership, management and operation of Ships. from the reactions of the air other than the reactions of
Activities that might be treated as ancillary to the the air against the surface of the earth. It includes drones
Qualifying Activity of ownership, management and but does not include hovercraft or spacecraft.
operation of Ships, provided that they naturally and
integrally complement the main Qualifying Activity and Logistic Services: Logistics services include transporting
meet the conditions for ancillary activities include ship goods, warehousing, inventory management,
broking, organising and overseeing voyages. declaration and documentation, freight forwarding
services, order fulfilment, packing. Logistic services do
Reinsurance services: Activities that might constitute not include the movement of people.
the Qualifying Activity of reinsurance services include
underwriting premium, salvage and subrogation Distribution of goods or materials in or from a Designated
recoveries, claim handling or management, loss Zone: Distribution involves transporting, storing, and
adjusting and claims management. selling products, with the distributor holding title to
the products. It includes activities like purchasing,
Ancillary activities may include investing activities, warehousing, logistics, inventory management, and
actuarial services, and risk management. order processing in or from a Designated Zone.

Fund Management Services: Fund management High sea sales are covered as a Qualifying Activity.
services might include investment planning and Distribution excludes intangible products and end-user
strategy, investment diversification, Asset allocation, sales. Ancillary activities include marketing, quality
Fund management, Performance monitoring. control, and customer support.

Ancillary activities may include financial advisory. Interest Income: The interest income earned by the
Training and education, financial planning, and FZP in startup phase may be considered as income
technological support. from Qualifying Activities under Treasury and financing
services to related parties.
Wealth and Investment management services: Wealth
and investment management services would include
Portfolio management, Financial planning, and Asset
allocation.

Ancillary activities may include risk management, market
research, investment analysis and family governance.

Headquarter Services to Related Parties: Activities
that might constitute headquarters services to related
parties includes Taking relevant management/ strategic
decisions, Incurring operating expenditure on behalf of
group entities, Co-ordinating group activities, Financial
Management, Central procurement services, Human
resource management, Technical support Legal and
compliance services, Intellectual property management.

Treasury and financing services to related parties:
Shareholder loans fall under the scope of financing
services and there is no threshold for the amount of
loans that must be granted in order to qualify for the
Qualifying Activity of treasury and financing services.

Any payment received as part of conducting the treasury

8 www.icaidubai.org

UA E TAX UPD ATE NEWSLET TER ISSUE 02 - May 2024