Your Free Zone Filing Needs an Evidence File

• 04 September, 2026
• By Safwan, Managing Partner
• Corporate Tax

Last reviewed 4 September 2026 by the Exiloz tax team against the UAE legislation in force on that date. Tax law moves — confirm any figure against tax.gov.ae before you act on it.

A zero-rate return still needs proof

30 September is not a form-filling deadline. It is the point by which a calendar-year free zone company must be able to show why its income qualifies, how its expenses were allocated, and where its audit evidence sits. A zero-rate result does not remove the return. The FTA treats a QFZP as a taxable person, and the return is self-assessed. If your ledger says ‘free zone revenue’ without contracts, customer evidence and a clean tax split, the weak point is already in the file. If you would rather not handle this in house, this is what our free zone tax filing support covers.

A filing date only helps if the accounts are ready behind it. For a company whose Tax Period ended on 31 December 2025, the nine-month rule produces a 30 September 2026 deadline. A company with another year-end must count nine months from its own Tax Period end. The rule comes from Article 53 of Federal Decree-Law No. 47 of 2022, and it applies to Free Zone Persons as taxable persons. Filing at 0% is still filing.

30 September applies to a particular year-end

The date in the working title is for a calendar-year company filing its return for the year ended 31 December 2025. It is not a universal free-zone date. Check the Tax Period shown in the FTA registration record first, then check whether the return is the first return or a later one.

A licence renewal date does not set the Corporate Tax deadline.

The return is self-assessed. That puts the burden on the company to make the QFZP position clear before submission, not after a request for documents. Start the evidence file now.

A QFZP claim starts with five conditions

Article 18 is the starting test. A Qualifying Free Zone Person must have actual and sufficient presence in the UAE, derive Qualifying Income, avoid an election into the standard Corporate Tax regime, comply with the transfer pricing and record rules in Articles 34 and 55, and meet further conditions prescribed by the Minister. Ministerial Decision No. 229 of 2025 adds the de minimis and audited-financial-statement conditions.

A free-zone licence proves where a company is registered. It does not prove that every line of revenue is Qualifying Income.

The revenue map is the heart of the return

Cabinet Decision No. 100 of 2023 supplies the income categories. Ministerial Decision No. 229 of 2025 supplies the current qualifying and excluded activity list. Read them together. For each revenue stream, record the customer type, the actual service or goods supplied, the activity classification, the place where the work happened, and the supporting contract or invoice.

The FTA guide shows the practical split. A QFZP must separate revenue related to Qualifying Income from the revenue that is taxed at 9%, then allocate expenses in a reasonable way consistent with the arm’s-length principle. Our QFZP income guide covers the classification questions. This filing checklist is about proving the answer in the working papers.

The 5% test is a calculation, not a feeling

Article 3 of Ministerial Decision No. 229 of 2025 sets the de minimis limit at the lower of 5% of total Revenue or AED 5,000,000. The calculation is based on the relevant revenue after the exclusions set by the Cabinet decision. Do not compare an isolated invoice with the threshold. Build the numerator and denominator from the same tax-period ledger.

If non-qualifying Revenue exceeds that lower limit, the company ceases to be a QFZP from the beginning of the relevant Tax Period and for the following four Tax Periods under Article 5 of the decision. That is why a small side activity deserves its own line in the review.

The audit file must reconcile to the tax split

Ministerial Decision No. 84 of 2025 requires every QFZP to prepare and maintain audited financial statements, regardless of Revenue. The statements do not need to be two separate audited sets for Qualifying Income and other income. The file does need enough detail to show how the split and expense allocation were calculated.

That makes the audit report only one part of the pack. Keep the trial balance, general ledger, revenue bridge, allocation note, related-party schedule and reconciliation to the return together. For the wider audit requirement and its interaction with Corporate Tax, see our audited financial statements guide.

Keep the records for seven years after the end of the Tax Period. A clean folder structure is cheaper than reconstructing the file from email later.

Related-party work belongs in the filing pack

A free-zone group company often earns from headquarters, treasury, financing, management or procurement services. Those labels do not settle the tax result. The agreements, invoices, benefit received, pricing method and allocation keys must match the activity actually performed.

Where related-party transactions exist, bring the register and pricing support into the same review as the QFZP revenue map. The UAE transfer pricing guide explains the broader documentation work. For this return, the practical question is narrower: can each related-party amount be traced from contract to ledger to tax treatment?

Designated-zone distributors have one more report

The newer rule that catches distributors is FTA Decision No. 6 of 2026. It applies to a QFZP carrying on the qualifying activity of distributing goods or materials in or from a Designated Zone for Tax Periods starting on or after 1 January 2026.

That company must obtain an agreed-upon procedures report from an independent external auditor. The report must test evidence that customers resell, process or alter the goods, and that imported goods entered the UAE through a Designated Zone. The decision lists trade licences, signed customer confirmations, sales agreements, invoices, customs documents, shipping documents, inventory logs and goods-movement records as examples of the evidence to retain.

The report is submitted to the FTA no later than 30 days after the Corporate Tax return deadline. If the return deadline is 30 September 2026, set 30 October 2026 as the report date in the closing plan. The report is not a substitute for the return or the annual audit.

A worked example shows what the return needs

Illustrative example: a free-zone company has total Revenue of AED 6,000,000, including AED 250,000 of non-qualifying Revenue. Five percent of total Revenue is AED 300,000. The lower of AED 300,000 and AED 5,000,000 is AED 300,000, so AED 250,000 is below the de minimis limit. After expense allocation, assume the company has AED 1,200,000 of Qualifying Income profit and AED 200,000 of other Taxable Income. The first component is taxed at 0%. The second is AED 200,000 × 9% = AED 18,000. The return must show the split, and the evidence file must support every amount.

The arithmetic is simple. The classification is where the work sits.

The mistake we see most is trusting the licence

The mistake we see most is treating a free-zone trade licence as proof that all revenue earns the 0% rate. In practice, the licence is copied into the filing folder while the customer type, beneficiary status, excluded activity check and expense allocation are left in separate emails. That creates a return which looks tidy but cannot explain its own numbers. The fix is a transaction-level revenue map prepared before the tax computation is signed.

One evidence question is still fact-dependent

One point remains unsettled in practical terms. The legislation does not prescribe one universal document list for every QFZP activity. FTA Decision No. 6 gives detailed procedures for designated-zone distribution, but a manufacturer, logistics provider or related-party service company still needs evidence suited to its own facts. A generic invoice may be enough to show an amount was billed. It is not automatically enough to show why the income qualifies.

What to put on the desk this week

1. Confirm the Tax Period end and write the filing deadline at the top of the workpaper.
2. Export the full revenue ledger and classify every stream under the current activity rules.
3. Tie the revenue split and expense allocation to the audited financial statements.
4. Add related-party support and, if relevant, start the designated-zone distributor report with the auditor.
5. Submit the return only after the evidence file can explain the 0% and 9% components.

If the split is still unresolved, Exiloz can reconcile the ledger and prepare free zone corporate tax filing support around the evidence you actually hold.

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