QFZP eligibility review
A structured assessment of legal status, qualifying activities, excluded activities, adequate substance, de minimis exposure, elections and filing position.
Free Zone business advisory
Accounting and Tax Support for UAE Free Zone Companies
A Free Zone licence does not automatically create a zero tax result. The company must understand its income streams, customers, activities, substance, transfer pricing and financial statement requirements before the correct treatment can be determined.
Partner led advice · UAE focused analysis · Review ready records
Structure specific support
Free Zone status must be supported by facts and records
Every Free Zone company is within the UAE Corporate Tax framework unless a specific exemption applies. A company may benefit from the Qualifying Free Zone Person regime only when it meets all relevant conditions and earns income that falls within the qualifying rules. The legal label alone is not sufficient.
CBMC reviews the full operating model. We examine the licence, exact location, customer type, contracts, place of performance, related parties, employees, premises, assets, decision making and revenue streams. The accounting system is then designed to identify qualifying income, non qualifying income and transactions that require separate treatment.
This page is relevant for
- Companies incorporated in UAE Free Zones and financial Free Zones
- Trading, service, manufacturing, logistics and holding structures
- Businesses selling to Free Zone, mainland and overseas customers
- Groups that need substance and transfer pricing support
- Companies assessing or maintaining Qualifying Free Zone Person status
Services for this structure
A complete Free Zone compliance framework
We connect the licence, operational substance, transaction flows and financial records so the tax treatment can be supported.
Income stream mapping
Revenue is classified by customer, activity, location, contract and source so qualifying and non qualifying amounts can be tracked throughout the year.
Accounting and audit support
Monthly bookkeeping, closing, financial statements, audit schedules and evidence files designed around Free Zone Corporate Tax requirements.
Transfer pricing and substance
Review of related party services, financing, management charges, people, premises, assets and decision making with supporting documentation.
VAT and customs coordination
VAT registration, return preparation, designated zone questions, imports, exports, evidence and reconciliation with the accounting ledger.
Corporate Tax return support
Return preparation, qualifying income schedules, tax adjustments, disclosure support and review of potential breaches before submission.
UAE considerations
The Free Zone regime is conditional
The zero percent Corporate Tax rate applies only to qualifying income of a qualifying entity. The company must continue to satisfy the conditions throughout the relevant period.
All Free Zone Persons register
Free Zone juridical persons generally need to register for Corporate Tax and file returns even when they expect all income to qualify for a zero percent rate.
Adequate substance
Core income generating activity must be supported by suitable employees, expenditure, operating assets and presence in the UAE in line with the nature and scale of the business.
Qualifying income analysis
Income must be tested by transaction and activity. Customer status, place of performance, commercial substance and the specific qualifying and excluded activity rules matter.
De minimis test
Non qualifying revenue must generally remain within the lower of five percent of total revenue or AED 5 million, subject to the detailed exclusions and calculation rules.
Transfer pricing compliance
Transactions with related parties and connected persons must be priced on an arm length basis. Documentation should match contracts, invoices, functions, assets and risks.
Consequences of a breach
Failure to meet the conditions can remove access to the Free Zone regime for the current period and a further minimum period under the applicable legislation.
Information we organise
Evidence must follow each income stream
Free Zone tax analysis is strongest when the classification is built into the ledger and supported by contracts and operational evidence from the start.
Free Zone licence, lease, incorporation documents and confirmation of the qualifying geographic area
Customer master file showing Free Zone, mainland, overseas, related party and natural person status
Contracts, invoices, delivery evidence and records showing where the activity was performed
Employee, premises, outsourced activity, asset and expenditure evidence supporting adequate substance
Related party agreements, allocation keys, financing terms and transfer pricing working papers
Audited financial statements, Corporate Tax schedules, VAT returns and reconciliation by revenue stream
How we work
A controlled process with clear ownership
Every stage has a defined purpose, required information, review point and practical output.
Eligibility map
We identify the legal entity, prescribed Free Zone area, licence activities, tax elections and filing history.
Transaction testing
Revenue is tested by customer, activity, source, location and exclusion category with a documented conclusion.
Control implementation
The ledger, customer coding, document flow and monthly review are configured to monitor the conditions continuously.
Annual certification
Financial statements, tax schedules and supporting evidence are reviewed before the return and audit are finalised.
Engagement output
A defensible Free Zone tax file
Management receives a clear conclusion, an evidence trail and a practical list of actions needed to protect the position.
A written QFZP eligibility and risk summary based on the current operating model
Revenue mapping between qualifying, non qualifying and separately taxable categories
A de minimis monitoring schedule updated through the financial year
Substance and transfer pricing action points with assigned responsibility
Audit and Corporate Tax working papers linked to the financial statements
Why CBMC
Partner led work with one accountable standard
Tax, accounting, audit and finance work are coordinated around one reconciled source of information.
Partner led accountability
A named senior contact coordinates the engagement and remains responsible for quality, communication and deadlines.
UAE specific analysis
Advice reflects the licence, legal form, Emirate, Free Zone status, activities, ownership and transaction flows.
Review ready records
Reconciliations, calculations, working papers and supporting evidence are organised for professional review.
Commercially useful reporting
Technical requirements are translated into decisions, priorities, responsibilities and practical next steps.
Frequently asked questions
Questions businesses ask before engaging us
These answers provide general guidance. The correct treatment depends on current legislation and the facts of the structure.
Does every Free Zone company pay zero percent Corporate Tax
No. Zero percent treatment is available only to a Qualifying Free Zone Person on qualifying income. Other taxable income can be subject to the standard Corporate Tax regime.
Does a Free Zone company still need a Corporate Tax return
Yes. Free Zone Persons are generally required to register and file a Corporate Tax return even when all income is expected to qualify for zero percent treatment.
Can a Free Zone company sell to mainland customers
Commercial permission depends on the licence and applicable regulations. For Corporate Tax, the treatment depends on the exact activity, customer and income category rather than the sales label alone.
Are audited financial statements required for a QFZP
Qualifying Free Zone Persons are required to prepare and maintain audited financial statements under the applicable Corporate Tax decisions. The exact audit scope should also be checked against Free Zone rules.
Can a company recover QFZP status after a breach
A breach can lead to loss of the regime for a minimum statutory period. The facts, timing and corrective action should be reviewed immediately before any conclusion is reached.
Start the conversation
Confirm the Free Zone position before filing
We will review the income streams, substance and records and explain what qualifies, what does not and what needs to change.
Important note UAE tax and regulatory treatment depends on the current law, implementing decisions, official guidance and the facts of each case. This page is general information and is not a substitute for a written professional opinion.
Content framework reviewed against official publications of the UAE Ministry of Finance and Federal Tax Authority.