Finance
Free Zone Companies and Corporate Tax: What You Actually Need to Know
0%
CT rate for qualifying FZ entities
9%
CT rate if conditions not met
40+
Free Zones across UAE
5 Yrs
Minimum loss of QFZP if breached
When the UAE introduced Corporate Tax, the most asked question from Free Zone businesses was: does it apply to us? Yes — but with a conditional 0% rate. Understanding the distinction is the foundation of CT compliance for every Free Zone entity.
Qualifying vs Non-Qualifying Income
QFZP Conditions — All Must Be Met
▸Established in a Qualifying Free Zone
▸Adequate substance — real employees, premises, decisions
▸Qualifying income only (or within de minimis threshold)
▸No election to be subject to standard 9% CT
▸Audited financial statements prepared in accordance with IFRS
▸Transfer pricing at arm’s length with documentation
Client Case Illustration
A JAFZA-registered technology company generated incidental mainland revenue not monitored against the de minimis threshold. Univia confirmed the 0% qualifying rate was at risk and implemented a revenue restructuring recommendation before the tax period closed, preserving QFZP status for the full year.
Contact Univia: info@univiaglobal.com | +971 50 223 5283
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