Free zone companies can continue to benefit from a 0% corporate tax rate on qualifying income under the Qualifying Free Zone Person (QFZP) regime, provided they meet the substance, audit, and transfer-pricing requirements of FTA Ministerial Decision 265.
Conditions to maintain QFZP status:
- Maintain adequate substance in a UAE free zone (office space + staff)
- Derive qualifying income from qualifying activities (trading with other free zone entities or approved international activities)
- Prepare annual audited financial statements
- Comply with UAE transfer pricing rules and documentation
Non-qualifying income is taxed at 9% above AED 375,000. YABS accounting packages include QFZP compliance assessment.
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