Free Zone Tax Compliance Software for UAE Businesses
Specialized tax compliance platform for DMCC, JAFZA, DIFC, ADGM, and all UAE Free Zone companies. Automate VAT returns, maintain 0% corporate tax eligibility, and ensure FTA compliance.
Free Zone vs Mainland: Tax Differences
Understanding the critical tax distinctions between Free Zone and Mainland entities in the UAE
Free Zone Entities
- 0% Corporate Tax on qualifying income for Qualifying Free Zone Persons (QFZPs)
- 100% Foreign Ownership without UAE national partner requirement
- Standard VAT Rate (5%) applies to taxable supplies
- De Minimis Rule: Non-qualifying revenue must stay below AED 5M or 5% of total revenue
- Substance Requirements: Must maintain adequate substance in Free Zone
- Qualifying Activities: Only specific business activities qualify for 0% CT rate
Mainland Entities
- 9% Corporate Tax on taxable income above AED 375,000
- 100% Foreign Ownership now permitted for most business activities
- Standard VAT Rate (5%) applies to taxable supplies
- No De Minimis Restrictions: Can conduct business with any entity type
- Flexible Location: Can operate anywhere in the UAE Mainland
- Direct Market Access: Can trade directly with UAE market without restrictions
Critical Compliance Note
Free Zone entities must carefully track qualifying income, maintain substance requirements, and monitor de minimis thresholds to retain 0% corporate tax benefits. TaxSey automates this complex tracking to ensure continuous compliance.
Free Zone-Specific Compliance Features
Purpose-built tools to maintain 0% corporate tax eligibility and ensure FTA compliance
Qualifying Free Zone Person (QFZP) Status
Automated assessment and continuous monitoring of QFZP status based on FTA criteria. Track all requirements for 0% corporate tax eligibility.
- • Qualifying activity verification
- • Adequate substance tracking
- • Annual QFZP status reports
0% Corporate Tax Eligibility Tracking
Real-time monitoring of qualifying income streams to ensure continued eligibility for 0% CT rate. Instant alerts for potential compliance risks.
- • Qualifying vs non-qualifying income categorization
- • Automatic income classification
- • Eligibility risk alerts
De Minimis Rule Monitoring
Automated tracking of non-qualifying revenue to ensure compliance with de minimis thresholds (AED 5M or 5% of total revenue).
- • Real-time de minimis calculations
- • Threshold breach warnings
- • Revenue mix optimization insights
Free Zone VAT Compliance
Specialized VAT handling for Free Zone transactions including Designated Zones, imports, exports, and mainland transactions.
- • Designated Zone transaction tracking
- • Import/export VAT treatment
- • Automated VAT return filing
Substance Requirements Tracking
Monitor and document adequate substance requirements including core income-generating activities, employees, and physical presence.
- • Core activity documentation
- • Employee and director records
- • Physical office compliance
FTA Corporate Tax Filing
Automated corporate tax return preparation and filing with FTA, optimized for Free Zone entities claiming 0% CT benefits.
- • QFZP status declaration
- • Qualifying income schedules
- • Direct FTA portal integration
Supported UAE Free Zones
TaxSey provides specialized compliance support for all 44 UAE Free Zones
D Dubai Free Zones
DMCC
Dubai Multi Commodities Centre
JAFZA
Jebel Ali Free Zone
DIFC
Dubai International Financial Centre
DAFZA
Dubai Airport Free Zone
DIP
Dubai Industrial Park
IFZA
International Free Zone Authority
Dubai South
Dubai World Central
DSO
Dubai Silicon Oasis
DMC
Dubai Media City
DIC
Dubai Internet City
DHCC
Dubai Healthcare City
DKP
Dubai Knowledge Park
IMPZ
International Media Production Zone
JLT
Jumeirah Lake Towers
TECOM
Dubai Technology Park
GDP
Gold & Diamond Park
DUCAMZ
Dubai Cars & Auto Zone
DSOA
Dubai Sports City
Meydan
Meydan Free Zone
DWTC
Dubai World Trade Centre
DGCX
Dubai Gold & Commodities Exchange
DFZ
Dubai Flower Centre
DTP
Dubai Techno Park
A Abu Dhabi Free Zones
S Sharjah Free Zones
R Ras Al Khaimah Free Zones
O Other Emirates
TaxSey supports all 44 UAE Free Zones with specialized compliance features for VAT, Corporate Tax, and FTA filing.
View Complete Free Zone DirectoryQualifying Activities for 0% Corporate Tax
Automatic classification of business activities to determine QFZP eligibility
Qualifying Activities
Manufacturing of Goods
Physical production, processing, or assembly of tangible goods within the Free Zone
Processing of Goods
Material alteration, refinement, or transformation of raw materials or components
Holding Shares & Other Securities
Ownership and management of qualifying shareholdings in subsidiaries
Ownership & Exploitation of IP
Intellectual property development, licensing, and commercialization
Headquarters Services
Group-wide management, coordination, and strategic services
Treasury & Financing Services
Group financing, cash management, and treasury operations
Distribution Hub Activities
Regional distribution, logistics coordination for group entities
Fund Management
Qualifying investment fund management activities
Ancillary Services
Services directly supporting qualifying activities (subject to conditions)
Non-Qualifying Activities
Transactions with UAE Mainland
Income from goods sold to or services provided to mainland UAE entities (subject to 9% CT)
Domestic Retail Trading
Direct sales to UAE consumers or end-users
Domestic Services to Individuals
Services provided to UAE resident individuals not related to business
Real Estate Activities (UAE)
Income from UAE real estate ownership, development, or management
Simple Storage & Warehousing
Basic storage without value-added services or processing
Regulated Financial Services
Banking, insurance, other regulated financial activities (unless in DIFC/ADGM)
Excluded Activities
Activities specifically excluded by Cabinet Decision, harmful tax practices
Mixed Activity Warning
If your Free Zone company has both qualifying and non-qualifying activities, TaxSey will automatically separate income streams and apply the correct tax treatment to each.
Why Free Zone Companies Choose TaxSey
Purpose-built for the unique compliance needs of UAE Free Zone entities
Protect Your 0% CT Status
Continuous monitoring of QFZP requirements, qualifying activities, and de minimis thresholds. Automated alerts before any compliance breach that could trigger 9% CT liability.
Automated Income Classification
AI-powered categorization of transactions into qualifying and non-qualifying income. Accurate application of 0% and 9% CT rates based on FTA guidelines.
De Minimis Risk Management
Real-time tracking of non-qualifying revenue against AED 5M and 5% thresholds. Predictive analytics to forecast de minimis breaches before they occur.
Substance Requirement Documentation
Comprehensive tracking of adequate substance indicators including employees, directors, physical office, and core income-generating activities performed in the Free Zone.
Specialized VAT Handling
Correct VAT treatment for Free Zone transactions including Designated Zone supplies, imports, exports, and mainland deliveries. Automated VAT return preparation.
Direct FTA Integration
Seamless filing of corporate tax returns, VAT returns, and other FTA submissions directly from TaxSey. No manual data entry or duplicate work required.
Maintain Your 0% Corporate Tax Status with Confidence
Join hundreds of Free Zone companies using TaxSey to protect their tax benefits and ensure FTA compliance. Start your 14-day free trial today.
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Free Zone Tax Compliance FAQs
Common questions about Free Zone corporate tax and compliance
What is a Qualifying Free Zone Person (QFZP)?
A QFZP is a Free Zone entity that meets specific criteria set by the FTA, including conducting only qualifying activities, maintaining adequate substance in the Free Zone, and complying with de minimis rules. QFZPs benefit from 0% corporate tax on qualifying income, while non-qualifying income is taxed at 9%.
What is the de minimis rule for Free Zone companies?
The de minimis rule allows QFZPs to earn limited non-qualifying revenue while maintaining 0% CT status. Your non-qualifying revenue must not exceed the lower of: (1) AED 5 million, or (2) 5% of total revenue. If you exceed these thresholds, all your income becomes subject to 9% corporate tax.
Can a Free Zone company trade with UAE mainland entities?
Yes, but income from transactions with UAE mainland entities is generally considered non-qualifying income subject to 9% corporate tax. However, this income can fall within the de minimis threshold. TaxSey automatically tracks mainland transactions and calculates their impact on your QFZP status.
What are adequate substance requirements for Free Zones?
To qualify for 0% CT, you must demonstrate adequate substance in the UAE Free Zone, including: core income-generating activities performed in the Free Zone, adequate number of qualified employees, adequate operating expenditure, and physical presence (office/facilities). TaxSey helps document and maintain these requirements.
How does VAT work for Free Zone companies?
Free Zone companies must register for VAT if their taxable supplies exceed AED 375,000. Supplies between Free Zones (Designated Zones) may be zero-rated, imports are typically zero-rated, and exports are zero-rated. Supplies to UAE mainland are subject to standard 5% VAT. TaxSey handles all Free Zone VAT scenarios automatically.
What happens if I lose QFZP status?
If you no longer meet QFZP criteria, all your income becomes subject to 9% corporate tax (on profits above AED 375,000). TaxSey provides early warning alerts if any compliance metrics approach thresholds that could jeopardize your QFZP status, allowing you to take corrective action before losing 0% CT benefits.
Does TaxSey support all UAE Free Zones?
Yes, TaxSey supports all 45+ UAE Free Zones including DMCC, JAFZA, DIFC, ADGM, DAFZA, and all others. Our platform is configured with Free Zone-specific rules, qualifying activities, and compliance requirements for each jurisdiction.
Can TaxSey handle both VAT and Corporate Tax for my Free Zone company?
Absolutely. TaxSey is a comprehensive tax compliance platform covering VAT, Corporate Tax, Excise Tax, and all FTA requirements for Free Zone entities. Single platform, unified data, automated compliance across all UAE tax types.