Qualifying Income
0%
A QFZP receives 0% Corporate Tax on Qualifying Income.
QFZP Tax Advisory Services in the UAE
Bestax helps UAE free zone companies assess, document, and maintain Qualifying Free Zone Person status.
We review your income, activities, substance, transactions, audited accounts, and Corporate Tax position. Our work focuses on protecting the 0% rate on Qualifying Income before filing problems arise.
Eligibility Reviews Income Classification De Minimis Monitoring Substance Documentation
- FTA Approved
Tax AgencyNo. 30008692 - Business Setup Partner
for Dubai Free Zones - 10+YEARSof Experience
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Book a Free
Consultation
Tell us your free zone, your licensed activities and who you invoice. We will set out which income can qualify for 0%, where your de minimis position stands and what the Tax Period needs on file — before your Corporate Tax return is prepared.
QFZP Advisory
QFZP Tax Advisory UAE Status Review Before Corporate Tax Filing
Bestax starts with a complete QFZP eligibility review for the relevant Tax Period. We test every condition against your actual business operations and financial records.
There is no separate application or certificate granting QFZP status. The treatment applies when every legal condition remains satisfied.
We document the conclusion before your Corporate Tax return is prepared.
Our review covers
- Free zone legal status
- Qualifying Income
- Qualifying Activities
- Excluded Activities
- De minimis limits
- Adequate substance
- Audited financial statements
- Related Party transactions
- Transfer pricing compliance
- Corporate Tax elections
- Domestic Permanent Establishments
- Foreign Permanent Establishments
Protect the 0% QFZP Corporate Tax Treatment
Bestax separates income qualifying for 0% treatment from income subject to 9% Corporate Tax. We support each classification using contracts, invoices, customer details, and accounting records.
Everything outside it
9%
Taxable Income outside that category is subject to 9%.
Band does not apply
AED 375,000
The normal AED 375,000 zero-rate band does not apply to a QFZP's non-qualifying Taxable Income. We reflect this treatment correctly within your tax computation.
Our income review identifies exactly which revenue receives each tax treatment.
Monitor the QFZP De Minimis Limit Before It Is Breached
Bestax calculates and monitors non-qualifying revenue throughout the Tax Period. This prevents an unexpected year-end breach from affecting your status.
Certain income is excluded from this calculation under the Free Zone rules. We separate those amounts before testing the threshold.
The de minimis test is satisfied when non-qualifying revenue stays below the lower of:
- 5% of total relevant revenue
- AED 5,000,000
Our service includes monthly or quarterly tracking for businesses with recurring non-qualifying transactions.
What Counts as Qualifying, and What Does Not
We compare your licence description with your actual transactions. The activity performed determines the tax treatment.
Classify Your Qualifying Activities Under the Current 2025 Rules
Bestax reviews your activities against Ministerial Decision No. 229 of 2025. This decision replaced the previous qualifying activity rules and applies from 1 June 2023.
Current Qualifying Activities include
- Manufacturing goods or materials
- Processing goods or materials
- Trading Qualifying Commodities
- Holding shares and securities for investment
- Ownership, management, and operation of Ships
- Reinsurance services
- Fund management services
- Wealth and investment management services
- Headquarter services to Related Parties
- Treasury and financing services
- Financing and leasing of Aircraft
- Designated Zone distribution
- Logistics services
- Qualifying ancillary activities
The 2025 rules also expanded commodity trading and clarified treasury activities.
Identify Excluded Activities Before They Affect QFZP Status
Bestax identifies revenue from activities that do not receive normal QFZP treatment. We isolate these transactions before calculating your de minimis position.
Specific exceptions apply within these categories. We examine the transaction rather than applying broad labels.
Current Excluded Activities include defined
- Transactions with natural persons
- Banking activities
- Insurance activities
- Finance and leasing activities
- Immovable property activities
- Activities ancillary to Excluded Activities
Our review shows which transactions require separate tax treatment and monitoring.
Economic Substance
Show the Substance Behind Your Qualifying Income
A QFZP must conduct core income-generating activities within the appropriate Free Zone. Distribution activities require the relevant substance inside a Designated Zone.
Build Evidence for Your Adequate Substance Requirement
Bestax reviews whether your UAE free zone operations demonstrate sufficient economic substance. We focus on the activities producing your Qualifying Income.
We review
- Core income-generating activities
- Employee roles
- Employee locations
- Qualifications
- Office and operational assets
- Operating expenditure
- Decision-making location
- Board activity
- Outsourced functions
- Supervision of service providers
Substance depends on the nature and scale of the business. Bestax documents why your resources support your operating model.
Review Outsourced Activities Without Weakening Your QFZP Position
Bestax checks outsourcing arrangements against the substance rules before relying on third-party providers.
Core activities can be outsourced within the required Free Zone when sufficient supervision exists. Distribution outsourcing follows the Designated Zone requirements.
We review
- Outsourcing agreements
- Service provider location
- Staff supporting your business
- Assets used
- Operating expenditure
- Management oversight
- Monitoring procedures
- Deliverable reviews
- Internal approvals
We document how your company observes, controls, and supervises outsourced work.
The Records Your QFZP Position Is Built On
Transfer pricing support, audited accounts and Designated Zone evidence are prepared before the return, so the filing reflects a position that is already documented.
Prepare QFZP Transfer Pricing Support for Related Party Transactions
Bestax reviews all Related Party transactions under the UAE arm's length principle. We connect transfer pricing support with your QFZP eligibility assessment.
Where documentation thresholds apply, we also prepare the required Master File and Local File support.
Our work covers
- Related Party mapping
- Controlled transaction values
- Intercompany agreements
- Management charges
- Shared services
- Financing
- Distribution transactions
- Royalties
- Transfer pricing methods
- Benchmarking support
This prevents your QFZP position from relying on unsupported intercompany pricing.
Prepare the Audited Financial Statements Required for QFZP Compliance
Every QFZP must prepare and maintain audited financial statements, regardless of revenue. Ministerial Decision No. 84 of 2025 confirms this requirement.
Bestax prepares your accounting file before it reaches the independent auditor. We reconcile the records supporting both the audit and Corporate Tax return.
Our preparation includes
- Trial balance review
- General ledger cleanup
- Bank reconciliations
- Related Party balances
- Revenue classification
- Expense review
- Fixed asset schedules
- Corporate Tax balances
- Supporting schedules
- Financial statement preparation
Audit work remains with the independent licensed auditor. Bestax keeps the accounting records ready for that audit. For more detail, read our Bestax guide on audited financial statements in the UAE.
Meet the New 2026 Designated Zone Distribution Requirements
Bestax provides additional compliance support for QFZPs distributing goods from a Designated Zone. FTA Decision No. 6 of 2026 applies to Tax Periods starting from 1 January 2026, and introduces additional procedures for qualifying distribution activities.
A qualifying distributor must obtain an agreed-upon procedures report from an independent UAE-licensed auditor. The report follows ISRS 4400 requirements.
Bestax prepares the records required for that engagement, including
- Customer trade licences
- Customer reseller declarations
- Sales agreements
- Purchase orders
- Sales invoices
- Customs declarations
- Import permits
- Bills of lading
- Inventory records
- Warehousing records
- Goods movement records
We also reconcile distribution revenue with the Corporate Tax records. The auditor's report must reach the FTA within 30 days after the Corporate Tax filing deadline.
Prepare Your QFZP Corporate Tax Return With the Correct Income Split
Bestax prepares your Corporate Tax return using the completed QFZP assessment. We do not decide the tax treatment after entering figures into EmaraTax.
Our team first reconciles the accounting records and income classifications.
We then review
- Qualifying Income
- Non-qualifying Taxable Income
- Permanent Establishment income
- Qualifying Intellectual Property
- Related Party transactions
- De minimis calculations
- Transfer pricing adjustments
- Audited financial statements
- Corporate Tax payable
The final tax return reflects the QFZP position already supported by your working papers.
Advice and Risk
Advice Before the Deal, and a Fix Before the Filing
A new transaction can change your Free Zone tax position, and a failed condition reaches further than one transaction. Both are reviewed while there is still time to act on the answer.
That Tax Period
Under the current rules, failure generally removes QFZP status from the beginning of that Tax Period.
Four Tax Periods
Standard treatment then continues for the next four Tax Periods.
Review Major Transactions Before Signing Them
Bestax provides pre-transaction QFZP advice when a new deal can change your Free Zone tax position.
We review proposed customers, contracts, activities, pricing, and delivery structures before the transaction begins. This gives management time to understand the Corporate Tax outcome.
Pre-transaction reviews are useful for
- New mainland customers
- Natural person customers
- Property transactions
- New Related Parties
- New financing arrangements
- New distribution models
- Business restructuring
- New service lines
- Intellectual property agreements
We provide the expected QFZP treatment and required documentation before execution.
Fix QFZP Risk Before Losing the Free Zone Tax Treatment
Failing a QFZP condition has consequences beyond one transaction. Bestax reviews high-risk cases before the Corporate Tax return is finalised.
Under the current rules, failure generally removes QFZP status from the beginning of that Tax Period. Standard treatment then continues for the next four Tax Periods. We review the cause and quantify the tax exposure before advising the next step.
Our risk review covers
- De minimis breaches
- Insufficient substance
- Missing audited accounts
- Unsupported Related Party pricing
- Excluded Activities
- Incorrect income classification
- Distribution compliance gaps
- Business model changes
This gives management a clear financial view before filing.
One Working File
Get an Annual QFZP Compliance File From Bestax
Bestax creates one annual working file supporting your QFZP Corporate Tax position. This keeps evidence together instead of spreading it across departments.
We update the file each Tax Period because QFZP status depends on continued compliance.
Read our detailed guide on how to keep Qualifying Free Zone Person status in the UAE.
Your annual QFZP file can include
- Eligibility assessment
- Revenue classification schedule
- Qualifying Activity analysis
- Excluded Activity analysis
- De minimis calculation
- Substance assessment
- Employee and asset support
- Related Party transaction schedule
- Transfer pricing support
- Audited financial statements
- Corporate Tax reconciliation
- Designated Zone evidence
- FTA-ready supporting records
Why Bestax
Why Choose Bestax for QFZP Tax Advisory UAE?
Bestax combines Corporate Tax, transfer pricing, accounting, and Free Zone advisory within one UAE team. Our work connects the 0% position with the records supporting it.
The Ministry of Finance updated Qualifying Activities through Ministerial Decision No. 229 of 2025. Our reviews use these current rules.
Review the official FTA Free Zone Persons guidance (opens in a new tab) for the wider Free Zone Corporate Tax framework.
Clients choose Bestax for
- FTA Approved Tax Agent support
- QFZP eligibility reviews
- Qualifying Income classification
- De minimis monitoring
- Substance documentation
- Transfer pricing support
- Audit-ready accounting
- Corporate Tax return preparation
- Designated Zone compliance
- FTA response support
Other Tax and Compliance Services From the Same Team
A free zone position is only as good as the records behind it. We keep those compliant too.
Corporate Tax Consultancy
Advice, planning and compliance under UAE corporate tax law, from one accountable tax team.
Corporate Tax Registration
FTA registration through EmaraTax, with the deadline and the TRN handled for you.
Corporate Tax Return Filing
Figures prepared, reliefs applied and the return filed with the FTA inside the nine-month window.
Transfer Pricing
Related Party pricing benchmarked and documented, with the Master File and Local File where thresholds apply.
External Audit
An independent statutory audit by a licensed UAE firm — the audited accounts a QFZP has to hold.
Accounting & Bookkeeping
Bookkeeping, IFRS reporting and audit-ready files — the records a free zone tax position is built from.
Frequently Asked Questions
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