UAE Corporate Tax 0% Rate: Who Qualifies (QFZP Explained)
"0% tax in a UAE free zone" is one of the most repeated claims about the country — and one of the most incomplete. The 0% rate isn't automatic. It applies only to Qualifying Free Zone Persons (QFZP), and QFZP status comes with real conditions.
The baseline: 9% above AED 375,000
UAE Corporate Tax applies at 9% on profit above AED 375,000. Below that threshold, the rate is effectively 0% for everyone, free zone or mainland. This baseline relief is often confused with the separate, more specific QFZP regime.
What QFZP actually requires
- Adequate substance in the UAE — real operations, not a mailbox
- Income that qualifies as "Qualifying Income" under the specific rules for your activity
- Compliance with de minimis limits on non-qualifying income
- Arm's-length pricing and transfer-pricing documentation for related-party transactions
- Audited financial statements — mandatory for every QFZP, regardless of revenue size
The part most business owners miss
A QFZP with AED 2M in revenue still needs an audit to keep its 0% status — audit isn't only for large companies. If a free zone company fails any QFZP condition, it can lose Qualifying Free Zone Person status and become subject to the standard 9% rate on all profit above AED 375,000, not just the non-qualifying portion.
How A&D reviews this
We assess QFZP eligibility case by case against your actual activity and income mix, not as a blanket assumption that "free zone means 0% tax." This sits alongside our monthly bookkeeping (from AED 700/month) and audit management service — see the full Tax, Accounting & Compliance page, including the detailed breakdown of which jurisdictions require an audit regardless of the AED 50M threshold most people assume is universal.
Final price depends on activity, structure and visa quota — request a fixed quote.