The QFZP Rules Your Old File May Miss

The Activity Test Has A New Source

Ministerial Decision No. 229 of 2025 replaced the earlier Ministerial Decision No. 265 of 2023 for qualifying and excluded activities. The Ministry of Finance says the newer decision clarifies the scope of Qualifying Activities, including changes to qualifying commodity trading and related-party treasury and financing services. A working paper that still cites only the old activity list is not ready to carry into a current return.

The change matters because the label on a trade licence does not describe the customer, beneficiary or actual work performed. The current decision has to be read beside the sales contracts, invoices, customer records and general ledger. For commodity trading, the file should show the commodity category and the quoted price evidence that supports the classification, rather than rely on a broad activity phrase.

If the old activity note is on your desk, stop copying it. Compare each revenue stream with Ministerial Decision No. 229 of 2025, record the conclusion beside the contract that supports it, and mark any stream that needs a separate review. That gives the company a usable decision file instead of a new cover page placed over an outdated answer.

Some Businesses Need A Fresh Test

The review is most urgent for a free-zone company claiming QFZP treatment through commodity trading, related-party treasury or financing, intellectual property, or distribution of goods. A company using the standard Corporate Tax rules may still keep the decision in its reference file, but it does not need to prove a QFZP rate for income it has not claimed as qualifying.

The object that changes the answer is the transaction, not the licence. A customer contract can show whether the buyer is a Free Zone Person and the beneficial recipient. A related-party agreement can show what treasury or financing service was actually provided. An invoice alone may show an amount, but it may not show the operational facts needed for the activity test.

We would not carry an old activity matrix into the return without rebuilding it, because the Ministry of Finance expressly replaced the earlier decision. That extra review is justified when one excluded stream can affect the QFZP conclusion, and the current matrix can be checked against the exact contract and ledger line instead of a remembered summary.

• Commodity trading
• Related-party treasury
• Customer and beneficiary tests
• Distribution from a Designated Zone

The Documents Show What Changed

Start with the licence, activity approvals, customer master, sales contracts, invoices, purchase orders and revenue ledger. For each stream, write down the goods or service, customer type, place of performance, beneficial recipient and the activity paragraph used. Keep the current Ministerial Decision No. 229 of 2025 with that analysis so the reviewer can read the rule and the evidence together.

A distributor in or from a Designated Zone has a further document trail. FTA Decision No. 6 of 2026 requires an agreed-upon procedures report from an independent external auditor. Its evidence examples include customer licences, signed reseller confirmations, sales agreements, invoices, import declarations, customs-clearance documents and shipping papers. The report tests the customer resale position and the Designated Zone route of imported goods.

The evidence boundary is narrow but real. FTA Decision No. 6 of 2026 gives additional procedures for the specified distribution activity, yet it does not specify one universal document list for a manufacturer or service company with different facts. The correct response is not to hedge every conclusion. It is to name the document that supports the activity and flag the edge case that the published procedure does not cover.

• Current activity decision
• Customer and transaction records
• Customs and shipping evidence
• Independent auditor report where required

The De Minimis Test Needs A Bridge

Ministerial Decision No. 229 of 2025 sets the de minimis limit at the lower of 5% of total Revenue or AED 5,000,000 for the Tax Period. The denominator is the total Revenue used for the test, not a convenient selection of invoices. Build the bridge from the trial balance to the revenue categories first, then show which lines are being treated as non-qualifying.

Worked example: the ledger shows total Revenue of AED 6,000,000 and non-qualifying Revenue of AED 250,000. Five percent of AED 6,000,000 is AED 300,000. The lower of AED 300,000 and AED 5,000,000 is AED 300,000, so the AED 250,000 amount is below the stated de minimis ceiling in this illustration. The classification of the AED 250,000 still needs its own evidence.

The mistake we see most is treating the percentage as a permission to ignore a small stream. It is a calculation after the stream has been identified under the current decision. Keep the invoice list, customer facts, activity note and arithmetic together. If management cannot explain why the numerator belongs in the test, the percentage result is not yet a finished conclusion.

Build The Current File In Order

A clean update follows the reader's decision path. First identify every revenue stream in the general ledger. Next match each stream to Ministerial Decision No. 229 of 2025 and Cabinet Decision No. 100 of 2023. Then test the de minimis bridge, related-party records and audited financial statements. If the company is a Designated Zone distributor, give the independent auditor the customer and import sample file early.

Ministerial Decision No. 84 of 2025 requires a QFZP to prepare and maintain audited financial statements. The audit report is not proof that every revenue line is qualifying. The useful file is the combination of signed statements, trial balance, revenue bridge, allocation note, current activity matrix and the transaction documents that make the classification readable.

The decision point is simple. If the current rule and the contract agree, preserve both and move to the computation. If they do not agree, do not let the old matrix decide the return. Record the conflict, obtain the missing object or obtain advice on the classification before submission. Exiloz can review that file, but it is not a registered Tax Agent and does not perform statutory audits.