Accounting for free zone companies in the UAE
We tag your revenue by activity and customer every month, track your de minimis headroom, and keep the books ready for the audit a Qualifying Free Zone Person needs.
- Fixed monthly fees Agreed in writing before we start.
- Office in Business Bay ParkLane Tower, Park Regis.
- Filed on EmaraTax We submit your VAT and corporate tax returns.
- WhatsApp replies In working hours, Monday to Saturday.
What we fix in the first month
The 0% free zone rate is not a status you hold. It is a test you pass each tax period, and your books decide the result.
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Assuming 0% applies automatically
A licence alone does not give 0%. A Qualifying Free Zone Person pays 0% only on qualifying income.
We review your income and activities against the conditions before the year starts.
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Revenue not tagged by activity
Mainland, related-party and overseas sales go to one revenue line and cannot be separated at the year-end.
We code each invoice by activity, customer type and location as it is posted.
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De minimis checked too late
Non-qualifying revenue must stay within 5% of total revenue or AED 5 million, whichever is lower.
We report the remaining headroom in every monthly pack.
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No audit planned
Every Qualifying Free Zone Person needs audited financial statements, whatever its revenue.
We keep reconciliations and year-end schedules current, so the audit can start soon after the year-end.
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Related-party charges without paperwork
Recharges and loans between group companies with no agreements or reconciled balances are hard to defend.
We document intercompany charges and reconcile balances with the other side every month.
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VAT assumed not to apply
A free zone licence does not by itself take a company outside VAT.
We check your VAT position and track taxable sales against the AED 375,000 threshold.
What your monthly report shows
We agree five or six measures with you in the first month and keep them stable, so the trend means something.
- Qualifying revenue % Qualifying income as a share of total revenue, year to date.
- De minimis headroom How much more non-qualifying revenue you can earn this period.
- Revenue by customer location Free zone, mainland and overseas customers.
- Related-party balances Amounts owed to and by group companies, reconciled.
- Audit file status Year-end schedules complete against what the auditor will ask for.
The full pack adds profit and loss against budget, cash and ageing. See MIS reporting
Tax points we check
Each point is taken from the law or FTA guidance named under it.
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0% on qualifying income, 9% on the rest
A Qualifying Free Zone Person pays 0% corporate tax on qualifying income and 9% on taxable income that does not qualify.
Source: Federal Decree-Law 47 of 2022, Art. 3(2)
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The de minimis limit
Non-qualifying revenue must not exceed 5% of total revenue or AED 5 million, whichever is lower. Qualifying and excluded activities are listed in Ministerial Decision 229 of 2025.
Source: Cabinet Decision 100 of 2023, Art. 4; Ministerial Decision 229 of 2025
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Audit required, no Small Business Relief
Every Qualifying Free Zone Person must prepare audited financial statements, whatever its revenue, and cannot elect Small Business Relief.
Source: Ministerial Decision 84 of 2025; Ministerial Decision 73 of 2023
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Register within three months
A company incorporated on or after 1 March 2024 must apply for corporate tax registration within three months of incorporation. The late registration penalty is AED 10,000.
Source: FTA Decision 3 of 2024; Cabinet Decision 75 of 2023, as amended
Frequently asked questions
Ask us on WhatsAppDoes every free zone company pay 0% corporate tax?
No. Only a Qualifying Free Zone Person pays 0%, and only on qualifying income. It has to earn qualifying income, stay within the de minimis limit, prepare audited financial statements and meet the other conditions. Income that does not qualify is taxed at 9%.
What if non-qualifying revenue goes over the de minimis limit?
Then the company fails one of the conditions for the 0% rate. That is why we report the headroom every month, so you can act before the limit is reached rather than find out at the year-end.
Do I need an audit if my free zone company is small?
For corporate tax, every Qualifying Free Zone Person needs audited financial statements whatever its revenue. Free zones also set their own rules: IFZA asks for financial statements at each licence renewal, and DMCC companies file audited accounts within six months of the year-end. We plan the year-end around both.
Is my free zone company outside UAE VAT?
Not automatically. A free zone licence does not by itself take a company outside VAT, and registration follows the usual AED 375,000 threshold. We check your position when we set up your books.
Know your de minimis headroom every month
Send us last year's accounts and a sample of sales invoices. We will show you how your revenue splits and what we would track.
