Free Zone Corporate Tax Advisory Services UAE
Your Free Zone License Does Not Exempt You From Corporate Tax. It Changes How the Tax Applies.
Free zone companies operate under the same Corporate Tax law as mainland businesses. The difference is that qualifying free zone persons can access a preferential rate on eligible income. But this distinction creates complexity that mainland companies do not face. You need to classify income, prove substance, track de minimis thresholds, and document transfer pricing, all while meeting the same registration and filing obligations as everyone else. Jazaa advises free zone companies on every aspect of their Corporate Tax position.
The Unique Tax Position of Free Zone Companies
Corporate Tax Still Applies
Every free zone entity must register for Corporate Tax, file returns, maintain records, and comply with the full scope of the law. QFZP status does not remove these obligations. It only affects the rate applied to qualifying income.
Income Splitting Is Required
If you earn both qualifying and non-qualifying income, each must be tracked separately. Your return must report them distinctly, and different rates may apply to each category. Getting the split wrong can trigger a reassessment by the FTA.
Substance Must Match Claims
The FTA can challenge QFZP status if your UAE substance does not match the activities and income you report. Advisory firms, consultancies, and service businesses in free zones face specific substance questions in this context.
Why Free Zone Companies Choose Jazaa
QFZP eligibility assessed and documented for every tax period
Income classified correctly between qualifying and non-qualifying
Compliance managed alongside your free zone licensing obligations
How Jazaa Advises Free Zone Businesses on CT
- 1
Free Zone Tax Position Review
We assess your current position including entity structure, income sources, related parties, and substance to establish a baseline.
- 2
QFZP Condition Mapping
We map your operations against every QFZP condition and identify where you meet the requirements and where gaps exist.
- 3
Income Classification Guidance
We provide clear guidance on which revenue streams qualify and which do not, with documentation to support each classification.
- 4
Annual Filing Support
We prepare your CT return with the correct treatment for free zone income, ensuring your QFZP election and income split are properly reported.
Everything Included in Your Free Zone Tax Advisory
- Full QFZP eligibility assessment for the current tax period
- Income stream classification with supporting rationale
- De minimis revenue monitoring
- Substance requirement review and documentation guidance
- Transfer pricing review for related party transactions
- Corporate Tax return preparation with free zone treatment
- Annual position summary for your records
- Ongoing advisory for regulatory changes affecting free zones
Common Questions About
Free Zone Corporate Tax
The law applies uniformly. However, the FTA distinguishes between designated zones for VAT purposes and free zones for Corporate Tax. Your free zone's designation affects VAT treatment, not Corporate Tax treatment.
Yes. You can elect to be treated as a standard taxpayer. This election may be relevant if it allows access to loss carry-forwards or other benefits not available to QFZPs.
Revenue from mainland clients generally does not qualify for QFZP treatment. If the majority of your income comes from mainland sources, you will likely pay the standard rate on that portion.
Free zone authorities maintain their own records, but the FTA has access to licensing and registration data across all UAE zones. Consistency between what you report to your zone authority and to the FTA matters.
Yes. We advise free zone companies across all UAE Emirates including Abu Dhabi, Sharjah, Ras Al Khaimah, Ajman, Fujairah, and Umm Al Quwain.
Get In Touch
contact@jazaa.com
LOCATION
Dubai, UAE with clients across all Emirates
Meeting
Book a consultation to discuss your specific financial needs
