The QFZP Working Paper File Is the Return

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

Last reviewed 10 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 0% rate still needs a clean bridge

The tax return does not start in EmaraTax. It starts in the working papers that connect the trial balance to the QFZP income split. A free-zone licence is not proof that every invoice qualifies for 0%. Your file must show what each revenue stream is, which costs belong to it, how shared costs were divided, and how the final numbers agree with the audited financial statements. If the bridge is missing, the return is not ready, even when the tax calculation looks simple. If you would rather not handle this in house, this is what our free zone filing support covers.

A QFZP working-paper file is the explanation behind the return. Under Federal Decree-Law No. 47 of 2022, the Tax Return must state the Taxable Income and Corporate Tax Payable, and the Authority can request information, documents or records reasonably needed to apply the law. That makes the supporting bridge part of the filing work, not an afterthought.

A QFZP file is a bridge, not a folder of PDFs

Start with the ledger.

The file should lead a reviewer from the signed trial balance to the figures used in the return. It should show the starting revenue and expenses, the classification decisions, the allocation method, the tax adjustments and the final QFZP calculation. Bank statements and licences still matter. They do not replace that chain.

Your deadline follows the Tax Period end

The return follows the period.

Article 53 of the Corporate Tax Law sets the filing deadline at no later than nine months from the end of the relevant Tax Period, unless the FTA directs another date. The FTA’s published example says a company with a financial year ending on 31 December 2025 must file and pay by 30 September 2026. That date is useful for calendar-year companies. It is not a universal free-zone deadline, and a licence renewal date does not change it.

For a 30 September filing, set an internal date earlier for closing the revenue map, obtaining the audit report and resolving open classifications. A file that is technically complete on the deadline can still be commercially late if the auditor or finance team has no time to challenge the assumptions.

Put every revenue line in a map

A licence is not a tax map.

The first named rule is Cabinet Decision No. 100 of 2023. It identifies the income categories that can produce Qualifying Income, including transactions with a Free Zone Person that is the Beneficial Recipient, and transactions connected with Qualifying Activities that are not Excluded Activities. The current activity list sits in Ministerial Decision No. 229 of 2025.

Build one row for each revenue stream. Record the customer’s legal status, the person who benefits from the supply, the activity actually performed, the place where it was performed, the contract reference and the selected tax treatment. A customer described as ‘group company’ is not enough. The file must show whether it is a Free Zone Person and whether it is the Beneficial Recipient.

Our QFZP income guide covers the classification questions. This file should carry the transaction-level evidence that supports the conclusion.

The de minimis test needs one denominator

One line can change the outcome.

Article 3 of Ministerial Decision No. 229 of 2025 says the de minimis condition is met when non-qualifying Revenue does not exceed the lower of 5% of total Revenue or AED 5,000,000 for the Tax Period. The denominator is not whatever total happens to be convenient. Revenue that the rules exclude from the calculation must first be removed, and the remaining total must reconcile to the underlying ledger.

Show the calculation on its own page. List the total Revenue used, every exclusion, the non-qualifying component, the percentage and the lower limit. If a reviewer cannot reproduce the percentage from the sales ledger, the schedule has not done its job.

A worked example shows the arithmetic

Here is an illustrative example. Assume a free-zone company has AED 8,000,000 of Revenue for the Tax Period, all included in the de minimis calculation. The working paper identifies AED 320,000 as non-qualifying Revenue. Five percent of AED 8,000,000 is AED 400,000. The lower of AED 400,000 and AED 5,000,000 is AED 400,000, so AED 320,000 is within the de minimis limit.

The same file then shows the profit bridge. Qualifying Revenue of AED 7,680,000 less direct qualifying costs of AED 4,200,000 and allocated shared costs of AED 640,000 gives AED 2,840,000 of Qualifying Income profit. Non-qualifying Revenue of AED 320,000 less direct costs of AED 120,000 and allocated shared costs of AED 160,000 gives AED 40,000 of other Taxable Income. At 0% on the Qualifying Income component and 9% on the other component, the illustrative Corporate Tax is AED 40,000 times 9% = AED 3,600.

The arithmetic is clean because the classifications were made first. If the AED 320,000 line rose above AED 400,000, the conclusion would need to be revisited from the start of the Tax Period.

Shared costs need a written allocation

Costs need a reason.

The FTA’s Free Zone Persons guide says revenue should be separated in the financial statements and expenses allocated against the Qualifying Income and other Taxable Income components in a reasonable manner consistent with the arm’s-length principle. Direct costs go to the income stream they support. Shared costs need a method that reflects cause and effect or the benefit received.

Revenue can be a reasonable allocation key in some cases. It is not a default for every cost. Headcount may fit shared HR. Floor space may fit premises. Usage or support tickets may fit technology. Time records may fit a service team. Write the reason beside the key, keep it consistent, and change it only when the facts change.

The mistake we see most is allocating every overhead line by revenue because the spreadsheet already has that percentage. That shortcut can put too much cost into a low-margin stream or too little into the operation using the resource. A reviewer should be able to read the allocation note and understand why the chosen key matches the work.

The audit file must tie to the return

Keep the tie-out visible.

Ministerial Decision No. 84 of 2025 requires a Qualifying Free Zone Person to prepare and maintain audited financial statements. The audit report is not the whole QFZP file. The working papers must explain how the audited totals become the revenue split, the allocated expenses and the tax result.

Keep the signed statements, audit report, final trial balance, general ledger export, revenue bridge and tax computation in one indexed pack. Add a reconciliation that proves total revenue, total expenses and profit agree across those documents. For the wider audit obligation, see our audited financial statements guide.

Corporate Tax records must be retained for seven years after the end of the Tax Period. The file should still make sense to someone who did not prepare it. Use stable file names, preserve the final version of each schedule and mark superseded calculations clearly.

Related-party charges need their own trail

A group invoice is not a conclusion.

Headquarter, treasury, financing, management and procurement charges can be part of a free-zone business. The working papers should connect the agreement, service description, beneficiary, pricing method, invoice and general-ledger entry. If the charge supports both income components, the allocation note should say how the benefit was measured.

This is where the UAE transfer pricing guide helps with the broader documentation question. For this return, keep the focus practical: can each related-party amount be traced from contract to work performed, from work performed to ledger, and from ledger to tax treatment?

A distributor may need an extra report

This is the new branch.

A QFZP distributing goods or materials in or from a Designated Zone has an additional evidence task for Tax Periods starting on or after 1 January 2026. FTA Decision No. 6 of 2026 requires an agreed-upon procedures report from an independent external auditor. The report tests, among other matters, whether customers resell, process or alter the goods and whether imported goods entered through a Designated Zone.

The report is due no later than 30 days after the Corporate Tax return deadline. Keep customer licences, signed confirmations, sales agreements, invoices, import declarations, shipping documents, inventory logs and goods-movement records together. Exiloz can organise the source pack and reconciliation. An independent auditor must perform and report the agreed-upon procedures.

What to do today when the file is not ready

One evidence point remains unsettled in practical terms. The law sets the tax tests, but it does not prescribe one universal document list for every QFZP activity. A distributor has detailed FTA procedures. A manufacturer, logistics provider or related-party service company still needs evidence that fits its own facts. Do not present a generic invoice as proof of an entire tax position.

1. Confirm the Tax Period end and write the filing deadline on the cover sheet.
2. Export the full revenue ledger and classify every stream before calculating profit.
3. Tie direct costs to the relevant stream and document the basis for each shared-cost allocation.
4. Reconcile the QFZP split to the audited financial statements and retain the final schedules.
5. If you distribute from a Designated Zone, start the independent auditor’s agreed-upon procedures pack now.

If the bridge still has gaps, Exiloz can prepare free zone tax return working papers around the records your business actually holds.

Frequently Asked Questions