As tax audits targeting Qualified Investment Projects (“QIPs”) are becoming increasingly common, DFDL wishes to remind taxpayers of the importance of compliance with Instruction No. 35495 GDT dated 17 November 2025 (“Instruction 35495”), issued by the General Department of Taxation (“GDT”). The Instruction clarifies the treatment and classification of income earned by QIPs during their Tax on Income (“TOI”) exemption period. Proper compliance with the Instruction is essential to minimize tax exposure and potential penalties during an audit.
The Instruction addresses: (i) commencement of the tax holiday period; (ii) types of income eligible for the TOI exemption; (iii) tax treatment of ancillary income (including rental and financial income); and (iv) circumstances requiring separate taxation or tax registration. The Instruction has been effective since 17 November 2025 and QIPs should already be applying the guidance.
For further detail, please visit DFDL.
