02 / FROM THE SOURCESWhat the official documents say.
A Qualifying Free Zone Person pays 0% Corporate Tax on its qualifying income — but the moment it earns disqualifying income beyond the allowed limit, it loses this status and is taxed at 9% on all of its profit.
To stay at 0%, the company must keep real substance in the free zone: staff, premises and operating spend that genuinely match the activities it carries on. A "letterbox" company will not qualify.
The de minimis rule allows a small amount of non-qualifying revenue — up to the lower of 5% of total revenue or AED 5 million. Cross that line and the 0% benefit is lost for the entire period.
Qualifying Free Zone Persons must prepare and keep audited financial statements. This is a hard condition of the 0% rate, not an optional extra.
Activities such as manufacturing, trading goods with other free zone businesses, and certain headquarter, treasury and fund-management services typically qualify; income from UAE mainland customers usually does not.
03 / THE KEY FACTSThe figures, with their sources.
| Fact | Value | Source |
|---|---|---|
| Qualifying Free Zone income tax rate | 0% | FTA — Free Zone Persons Guide CTGFZP1 |
| Non-qualifying income tax rate | 9% | FTA — Federal Decree-Law No. 47 of 2022 |
| De minimis threshold (non-qualifying revenue) | 5% of total revenue or AED 5M | FTA — Free Zone Guide |
| Audited financial statements | Mandatory for Qualifying Free Zone Persons | FTA — Free Zone Persons Guide |
04 / SOURCES & DOWNLOADSKnow what this guide rests on.
Legal basis: 3 primary source documents. Laws change; verify with the issuing authority before acting.