Free Zone Corporate Tax and QFZP Status
Whether your free zone company meets the Qualifying Free Zone Person conditions, and its return.
Corporate Tax in a free zone
A free zone licence does not take a company out of Corporate Tax. What it can do, if the company meets the law’s conditions, is make it a Qualifying Free Zone Person, taxed at “0% (zero percent) on Qualifying Income” and “9% (nine percent) on Taxable Income that is not Qualifying Income under Article 18” (Federal Decree-Law No. 47 of 2022, Article 3(2), consolidated text, Ministry of Finance).
We register the company, read its activities and income against those conditions with you, and prepare the return on the position you confirm. The free zones we work with are SPC Free Zone, SHAMS, Dubai South, Meydan, RAKEZ and Ajman NuVentures Centre; the zone’s own licence work is on our free zone licence pages.
What we review and file
- Registration on EmaraTax, the same application as any company: Corporate Tax Registration
- A conditions review: substance, income, the election, transfer pricing and audited statements, against Article 18
- A qualifying-income check of your revenue lines, with the decisions the law refers to
- The return, prepared on the position you confirm and filed once you approve
- The audited-statements requirement flagged early, so your auditor can be engaged in time
Get this quoted
Itemised in writing, government charges shown separately, before anything is filed.
Which one do you need?
Which free zone companies this is for
- Free zone companies filing their first return
- Free zone companies with mainland customers, whose income may not all be qualifying
- Groups with a free zone entity beside a mainland one
- Companies in the six free zones we work with, and others where the rules are the same federal ones
What we need to review your position
- The free zone licence and MOA
- Your Tax Registration Number, or the registration documents if you have none: Corporate Tax Registration
- The financial statements for the period, audited where the law requires it
- A breakdown of revenue by customer type and activity
- Related-party transactions, if any
We confirm the final list with you at quotation.
How a free zone file runs
- Your activities and revenue lines, read with you.
- A written quote.
- The conditions checked one by one, and the evidence for each listed.
- Your decision: the position is yours to confirm before anything is filed.
- The return prepared and filed on EmaraTax.
- The file kept for the next period, when the same conditions are tested again.
The conditions in the law
Article 18(1), the conditions (Federal Decree-Law No. 47 of 2022, consolidated text):
- "Maintains adequate substance in the State."
- "Derives Qualifying Income as specified in a decision issued by the Cabinet at the suggestion of the Minister."
- "Has not elected to be subject to Corporate Tax under Article 19 of this Decree-Law."
- "Complies with Articles 34 and 55 of this Decree-Law." (transfer pricing, and audited financial statements)
- "Meets any other conditions as may be prescribed by the Minister."
The Ministry of Finance puts the result simply: a Qualifying Free Zone Person "can benefit from a Corporate Tax rate of 0% on their Qualifying Income" (MoF, updated 13 November 2026). The return date is the same as any company's: nine months after the tax period (Article 53).
Fees: Quote on request. Our service fee is quoted in writing after a short review of your file, and any authority charge is listed separately in your quote.
The five conditions
Every one of the conditions in Article 18(1) has to hold for the whole period. Substance means people and premises in the State; the election is a choice the company can make against itself; Articles 34 and 55 bring in transfer pricing and audited statements. We list the evidence for each so the file answers the FTA's questions before they are asked.
Qualifying income
Which income qualifies is not in the law itself; it points to a Cabinet decision, and the activities to Ministerial decisions. Those decisions have been amended since 2023, so we read your revenue against the versions in force for your tax period rather than a summary written earlier.
Not published officially
- The current list of qualifying activities and the de minimis figures on the pages quoted here. They sit in the Cabinet and Ministerial decisions the law refers to; we confirm the version in force with you at quotation rather than print one from memory.
- A free zone authority's own tax rule. The Corporate Tax conditions are federal; your zone sets licence rules, not this one.
Free zone Corporate Tax questions
Do free zone companies pay Corporate Tax?
They are inside the law. A Qualifying Free Zone Person is taxed at "0% (zero percent) on Qualifying Income" and "9% (nine percent) on Taxable Income that is not Qualifying Income" (Article 3(2)).
What makes a company a Qualifying Free Zone Person?
Article 18(1) lists five conditions: adequate substance in the State, qualifying income as set by Cabinet decision, no election into the regular regime, compliance with Articles 34 and 55, and any other condition the Minister prescribes (law).
What is qualifying income?
The law leaves it to "a decision issued by the Cabinet at the suggestion of the Minister" (Article 18). We read your revenue against the current decisions with you at quotation.
Do I still need to register?
Yes. Registration is the same application as for any company: Corporate Tax Registration.
Do I still file a return?
Yes, within "(9) nine months from the end of the relevant Tax Period" (Article 53).
Can I take Small Business Relief instead?
The FTA lists "A Qualifying Free Zone Person" among those who cannot elect it (FTA).
Are audited accounts required?
The QFZP conditions include compliance with Article 55, the law's audited financial statements article (Article 18(1)(d)). The audit itself is done by your auditor, not by us.
Does it matter which free zone I am in?
The Corporate Tax conditions are federal and the same in every free zone. Your zone's own licence rules are separate: [free zone licence pages](/uae-services/trade-licence/#freezone).
What if some customers are on the mainland?
That income may not be qualifying, and the 9% rate applies to taxable income that is not (Article 3(2)). Your revenue split is reviewed with you before the return.
Every rule, deadline and threshold above names the authority that published it and the date shown on its page when we read it on 14 November 2026: the Federal Tax Authority (tax.gov.ae), the Ministry of Finance (mof.gov.ae) and the federal portal u.ae. Tax rules, fees and processing times are set by the authorities and can change without notice; confirm with the FTA before you rely on them. AL HUDHUD prepares and files on your instructions; your position is confirmed with you at quotation, and every decision rests with the Federal Tax Authority.
Last updated: November 2026.
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