UAE Corporate Tax · Defined Term
QFZP — Qualifying Free Zone Person.
A UAE Corporate Tax status that lets a free-zone company retain 0% tax on qualifying income — provided it meets four cumulative tests.
In one sentence
QFZP is the UAE Corporate Tax classification for free-zone companies that satisfy the substance, qualifying-activity, de minimis and audit requirements — and is the only path to keeping 0% UAE CT on qualifying income.
The four tests
- Adequate substance in the free zone (staff, premises, expenditure proportionate to activity).
- Qualifying income only — typically income from other free-zone persons or specified qualifying activities. UAE mainland sales are not qualifying.
- De minimis rule — non-qualifying revenue must be below the lower of 5% of total revenue or AED 5 million.
- Audited financial statements prepared under IFRS.
If you fail any one test
The whole company falls out of QFZP for that financial year. All taxable profit above AED 375,000 (USD 102,000) becomes subject to the 9% standard rate — not just the non-qualifying portion. This is the most common compliance trap.