Free Zone Corporate Tax Support

The UAE’s Corporate Tax regime offers a major advantage to Free Zone entities: a 0% preferential tax rate on Qualifying Income. However, this 0% rate is not automatic. Failing to meet even a single statutory requirement—such as maintaining adequate substance or breaching the de minimis threshold—will trigger the standard 9% corporate tax rate and disqualify your business for five consecutive years.

At OBG Outsourcing Private Limited, we provide end-to-end Corporate Tax compliance and advisory solutions specifically designed for Free Zone businesses. We manage the structural and administrative complexities so you can confidently safeguard your tax-exempt status.

Our Core Corporate Tax Services

We deliver structured support to ensure compliance with the Federal Tax Authority (FTA) guidelines, including the latest regulations under Ministerial Decision No. 229 of 2025.

1. QFZP Eligibility & Structural Assessment

We audit your corporate structure to verify if your business meets the strict legal definition of a Qualifying Free Zone Person (QFZP).

Evaluation of core business operations against approved Qualifying Activities (e.g., distribution of goods from designated zones, logistics, headquarter services, fund management).

Mapping and isolating Excluded Activities to prevent unexpected tax exposures.

Analyzing transactions with natural persons, mainland businesses, and foreign branches.

2. Substance & CIGA Compliance Verification

To claim the 0% rate, your company must demonstrate Adequate Substance within the Free Zone.

Review of Core Income-Generating Activities (CIGA) to ensure they are physically conducted within your zone.

Assessment of structural adequacy: validating operational expenditure, checking physical asset allocation, and verifying the headcount of qualified, full-time local employees.

3. Revenue Segmentation & De Minimis Monitoring

Non-qualifying revenue must not exceed 5% of your total revenue or AED 5 million (whichever is lower).

Implementation of strict transaction tracking to monitor your de minimis threshold in real-time.

Income segmentation modeling to separate qualifying free zone transactions from Domestic Permanent Establishments (PE) on the mainland (taxed at 9%).

4. Transfer Pricing & Arm’s Length Documentation

All transactions with related parties and connected persons must adhere strictly to the Arm’s Length Principle (Articles 34 and 35 of the Corporate Tax Law).

Developing and maintaining required Transfer Pricing documentation (Local Files and Master Files).

Benchmarking transactions against verified market indicators to satisfy FTA audit requirements.

5. Corporate Tax Registration, Filing & IFRS Audits

The FTA mandates that all QFZPs maintain audited financial statements prepared under International Financial Reporting Standards (IFRS), regardless of annual revenue.

Compiling and standardizing books of accounts for corporate tax readiness.

Managing the complete lifecycle: Corporate Tax registration, calculation of taxable income, and error-free annual return filing.

Why Partner with OBG Outsourcing?

  THE OBG EDGE   | Fully Compliant with the Latest 2025/2026 FTA Regulatory Updates | | Real-Time Transaction & De Minimis Threshold Monitoring          | | Seamless Integration of Accounting, IFRS Audit, & Tax Filing     |

Critical Risk Note: If a Free Zone entity fails an FTA compliance check, it loses its QFZP status retroactively from the beginning of that tax period and is barred from reclaiming the 0% rate for the subsequent four tax periods. Professional oversight is your strongest insurance policy.