Testing the four conditions
Your position against each Qualifying Free Zone Person condition, in a report that shows exactly where you stand.
Tax & Audit
Corporate Tax for Free Zone Companies
We establish whether your company meets the Qualifying Free Zone Person conditions, and which income stays at 0% and which falls to 9%.
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The most common misreading of UAE corporate tax is that sitting in a free zone means automatic exemption. It does not. The relief is conditional, and a company that loses the conditions loses them not for one year but for the current tax period and the four that follow.
A Qualifying Free Zone Person pays 0% on qualifying income and 9% on everything else. Four conditions apply: adequate substance in the zone, qualifying income, compliance with transfer pricing rules and documentation, and not having elected to be taxed at the standard rate.
On top of those sits the de minimis requirement: non-qualifying revenue must not exceed 5% of total revenue or AED 5,000,000, whichever is lower. Breaching it removes the status entirely.
We read your activities line by line, separate qualifying revenue from the rest, and measure the distance between you and the de minimis limit before you cross it.
What the service includes
Separating qualifying income
Classifying every revenue stream: qualifying at 0%, or subject to 9%, with the basis for each classification.
Monitoring the de minimis limit
Measuring non-qualifying revenue monthly, so a breach that costs the status does not arrive as a surprise.
Economic substance
Assessing assets, people and expenditure inside the zone against what the status requires.
Audited financial statements
A Qualifying Free Zone Person must have audited statements — we prepare them or review what was prepared.
Registration and filing
Registration is mandatory for free zone companies too, and the return is filed even at a zero rate.
Who is this service for?
- Free zone companies in Dubai, Abu Dhabi and Sharjah
- Companies selling to both the mainland and abroad
- Regional offices and distribution hubs
- Free zone holding companies
- Anyone who has received a query about their eligibility for the zero rate
Frequently asked questions
Is registration mandatory despite the zero rate?
Yes. Corporate tax registration is mandatory for free zone companies, and filing the return is mandatory too, even where the amount due is nil.
What happens if we breach the de minimis limit?
Qualifying Free Zone Person status is lost for the current tax period and the four following periods, so all income falls to 9%. That is why we track the ratio monthly rather than annually.
Does selling to the mainland remove the relief?
Not by itself, but most mainland income is treated as non-qualifying and counts toward the de minimis limit. The difference between one activity and another is large, which is why we read activities line by line.
What does this service cost?
Registration through the Federal Tax Authority platform carries no government fee. Our fee depends on how many revenue streams you have and how clearly they are separated in your books. You get a fixed figure after a free initial assessment — no open-ended items.
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Is your business ready for a regulatory inspection?
Message us on WhatsApp for a free initial assessment of your compliance position — no obligation.
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