FTA Decision No. 6 of 2026 changes how eligibility must be proved
For a Free Zone distributor, earning income from a qualifying activity is no longer enough by itself. Under FTA Decision No. 6 of 2026, an affected business must also prove that its transactions satisfy the required conditions. This proof must be examined by an independent external auditor and recorded in an Agreed-Upon Procedures (AUP) Report.
At NNCA, we understand why this new requirement may initially appear complicated. You may be asking a simple question: “My company already has audited financial statements, so why do I need another report?” The answer is that an annual financial statement audit and an Agreed-Upon Procedures (AUP) Report perform different functions.
The annual audit deals with your financial statements as a whole. The new report focuses on specified facts relating to your distribution activity. In particular, it examines whether your customers are resellers and whether imported goods entered the UAE through a Designated Zone.
FTA Decision No. 6 of 2026 was issued on 2 June 2026 and applies to Tax Periods commencing on or after 1 January 2026. The FTA published the Decision in July 2026. (Federal Tax Authority)
Decision at a glance
Who is affected?
Qualifying Free Zone Persons carrying out the distribution of goods or materials in or from a Designated Zone.
What is required?
An Agreed-Upon Procedures (AUP) Report from an independent external auditor licensed in the UAE.
What will be checked?
Customer reseller status and, where goods are imported, entry through a Designated Zone.
When does it apply?
Tax Periods beginning on or after 1 January 2026.
When must the report be submitted?
No later than 30 days following the Corporate Tax return filing deadline for the relevant Tax Period, unless the FTA determines another date.
What FTA Decision No. 6 of 2026 means for a UAE business owner
The UAE Free Zone Corporate Tax regime does not provide an automatic 0% rate merely because a company is registered in a Free Zone. A business must satisfy the conditions for being a Qualifying Free Zone Person, and the 0% rate applies to its Qualifying Income. Taxable Income that is not Qualifying Income is generally subject to the applicable 9% rate under the Free Zone regime. (Federal Tax Authority)
Distribution of goods or materials in or from a Designated Zone is listed as a Qualifying Activity under Ministerial Decision No. 229 of 2025. However, the activity has specific boundaries. It includes buying and selling tangible or movable goods and may include importation, storage, inventory management, handling, transportation and exportation.
For the distribution activity to fall within the prescribed definition, the activity must be conducted in or from a Designated Zone. Goods entering the UAE must be imported through a Designated Zone, and the goods must generally be supplied to a customer who resells them or processes or alters them for sale or resale. The Ministerial Decision also refers to supply to a public benefit entity.
FTA Decision No. 6 of 2026 adds a formal verification process to these existing requirements. It tells affected businesses what evidence must be maintained, what procedures the auditor must perform, how samples must be selected and when the resulting report must reach the FTA.
In simple business language, the new rule says:
Do not only say that you are a qualifying distributor. Maintain enough evidence for an independent auditor to test and report the facts.
Does FTA Decision No. 6 of 2026 apply to your company?
Not every Free Zone company requires this particular report. Not every trading company requires it either. The requirement targets a specific category of Qualifying Free Zone Persons.
Add Your Heading Text Here
Question 1: Is your company established in a UAE Free Zone?
- No: This particular requirement is unlikely to apply.
- Yes: Continue to Question 2.
Question 2: Is your company claiming or expecting to claim Qualifying Free Zone Person status?
- No: Review the standard Corporate Tax treatment applicable to your business.
- Yes: Continue to Question 3.
Question 3: Is your company carrying out the distribution of goods or materials in or from a Designated Zone?
- No: The company may have other Free Zone compliance requirements, but this particular distribution AUP requirement may not apply.
- Yes: Continue to Question 4.
Question 4: Are the distribution transactions being treated as a Qualifying Activity for the 0% Corporate Tax benefit?
- No: Review why the income is not being treated as Qualifying Income.
- Yes: Your business should assess the requirements of the Decision and prepare for the Agreed-Upon Procedures (AUP) Report.
Ministerial Decision No. 84 of 2025 already requires a Qualifying Free Zone Person to prepare and maintain audited financial statements. It also states that a qualifying distributor operating in or from a Designated Zone must comply with additional procedures prescribed by the FTA. The new Decision provides those procedures.
Learn how timely compliance can help your business avoid unnecessary penalties. Read our blog for a comprehensive guide to UAE corporate tax law, fines, and compliance.
Understanding UAE Corporate Tax Law: Penalties, Fines, and How to Stay Compliant | nairnelliyatt.com
Important Distinction
Free Zone does not always mean Designated Zone.
A company may be registered in a Free Zone without that location necessarily being a Designated Zone for the relevant purpose. Under the new procedures, the auditor must verify that the Free Zone, port or area shown in the import records is formally recognised as a Designated Zone. The relevant Free Zone Authority should confirm this status to the business.
Who can prepare the Agreed-Upon Procedures (AUP) Report?
The Agreed-Upon Procedures (AUP) Report must be obtained from an independent external auditor. This may be the same auditor responsible for the annual financial statement audit or another independent auditor licensed in the UAE.
The auditor must prepare the report in accordance with ISRS 4400, the International Standard on Related Services for agreed-upon procedures engagements, together with the legislation governing audit practices in the UAE.
An AUP engagement differs from a standard audit opinion. During an AUP engagement, the auditor performs the procedures specified by the applicable requirements and reports the factual findings. The business and the report’s users consider those factual findings.
For example, the auditor may report that:
- A selected customer’s trade licence includes wholesale trading.
- A customer declaration was signed, dated and related to the correct Tax Period.
- A customs declaration showed that goods entered through a stated Designated Zone.
- Inventory and warehouse records showed that goods were handled in that Designated Zone.
The auditor is not simply asking management whether the transaction qualifies. The auditor is inspecting the underlying evidence.
The two matters that every Agreed-Upon Procedures (AUP) Report must support
The Decision is detailed, but its central requirement can be divided into two evidence pillars.
| Evidence Pillar 1 | Evidence Pillar 1 |
|---|---|
| Prove the customer is a reseller | Prove the import entered through a Designated Zone |
| Customer trade licence | Customs declaration |
| Reseller declaration | Import permit |
| Sales agreement | Customs clearance record |
| Invoice and purchase order | Bill of lading or airway bill |
| Evidence of resale or processing for sale | Warehouse and inventory records |
| Transaction records | Goods movement and logistics records |
The Agreed-Upon Procedures (AUP) Report records the procedures performed and the related factual findings for these two areas.
Pillar One: Proving that your customers are genuine resellers
For Qualifying Free Zone Persons, a sale should not be treated as a qualifying distribution transaction merely because the purchaser is another company. The nature and intended use of the purchase matter.
The customer should be acquiring the goods or materials for one of the prescribed purposes. This may involve reselling the goods, processing them for sale, or altering them for sale or resale.
1. Keep a valid customer trade licence
The auditor must inspect a sample of valid trade, business or commercial licences, or equivalent documents. The listed activities should indicate that the customer carries out trading, wholesaling, retailing, distribution, manufacturing or another activity that supports reseller status.
A customer called “ABC General Trading LLC” is not automatically accepted merely because its name contains the word “trading.” The actual licensed activities and the relationship between those activities and the goods purchased must be examined.
2. Obtain a signed reseller declaration
The declaration or written confirmation should state that the customer acquires the goods or materials for sale, resale, or the relevant qualifying purpose. The Decision requires the auditor to check whether sampled declarations are:
- Signed;
- Dated;
- Connected to the relevant customer; and
- Related to the relevant Tax Period.
A declaration collected three years ago and placed permanently in the customer file may not establish the customer’s intention for the current Tax Period. For Qualifying Free Zone Persons, declarations should therefore be incorporated into a proper periodic compliance process.
3. Retain transactional records
The auditor must also inspect sales agreements, related invoices or other transaction records. These records may contain features indicating onward sale, such as bulk quantities, reseller terms or applicable pricing structures.
The documents should work together. A trade licence may establish that the customer is permitted to trade. A reseller declaration may establish the customer’s stated intention. The agreement, invoice and purchase order should then support the actual transaction.
This is why a single document should not be treated as the entire compliance file. FTA Decision No. 6 of 2026 expects a connected evidence trail.
A simple customer example under FTA Decision No. 6 of 2026
Consider an illustrative example involving a Free Zone distributor of electrical components.
The distributor sells 5,000 components to a UAE wholesaler. The customer’s valid licence includes electrical equipment trading. The customer signs a declaration stating that the components are purchased for resale during the relevant Tax Period. The purchase order, sales agreement and invoice show a bulk commercial transaction.
This is not automatic proof of final tax treatment. However, the documents create a consistent evidence trail for the auditor to inspect.
Now consider a weaker example. The customer’s licence only shows management consultancy. There is no signed declaration. The invoice description merely says “materials,” and there is no purchase order or agreement explaining the onward supply.
In this situation, the distributor may find it difficult to demonstrate reseller status during the Agreed-Upon Procedures (AUP) Report process. The weakness is not necessarily the sale itself. The weakness is the absence of reliable, connected documentation.
These examples are illustrative and should be assessed against the facts, contracts and licences of each business.
Pillar Two: Proving importation through a Designated Zone
Where goods or materials entering the UAE are imported by the Qualifying Free Zone Person, the evidence must demonstrate that they were imported through a Designated Zone.
The auditor’s work is not limited to reading the name of a port on one shipping document. The prescribed procedures include inspection of import documentation, confirmation of Designated Zone status and inspection of the company’s internal movement records.
1. Import and customs documentation
The auditor may inspect:
- Customs declarations;
- Import permits;
- Customs clearance documents;
- Sales contracts;
- Bills of lading;
- Airway bills; and
- Equivalent transportation documents.
The records should identify the goods, importer, date, entry point and relevant Designated Zone consistently.
2. Confirmation that the location is a Designated Zone
The auditor must verify that the location identified in the import documents is formally designated under the relevant legal instruments. The Decision states that the relevant Free Zone Authority should confirm this to the Qualifying Free Zone Person. A business should therefore not depend only on an internal assumption that its port or Free Zone is designated.
3. Internal warehouse and logistics records
The prescribed inspection can extend to:
- Inventory logs;
- Warehouse reports;
- Goods-received records;
- Goods movement records;
- Transport documents;
- Logistics reports; and
- Records showing handling or storage in the Designated Zone.
These records help establish what happened after the customs entry. They connect the legal import documents to the physical movement of the goods.
Why document consistency matters for Qualifying Free Zone Persons
For Qualifying Free Zone Persons, documents maintained by different departments should tell the same story.
The customs team may record one product code. The warehouse may use an internal stock code. The sales team may use a shortened product description. The accounting system may post the transaction under a general inventory category.
Different coding systems are not necessarily incorrect, but the business should be able to reconcile them.
For example:
| Document | Description shown |
|---|---|
| Supplier invoice | Industrial valve model V-220 |
| Bill of lading | Valve components |
| Customs declaration | HS classification and quantity |
| Warehouse record | Stock code IV220 |
| Customer invoice | V-220 industrial valve |
| Reconciliation file | Mapping all descriptions to IV220 |
This type of mapping allows the auditor to follow the transaction from entry to distribution. Without it, an otherwise genuine transaction can become difficult to verify during the Agreed-Upon Procedures (AUP) Report.
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How sampling works under FTA Decision No. 6 of 2026
The auditor is not automatically required to inspect every customer, agreement or import. The Decision establishes a sample-based procedure.
The prescribed formula is:
[
\text{Sample Size} =
\frac{\text{Sample Population}}
{1 + \left(\text{Sample Population} \times 0.10^2\right)}
]
The specified margin of error is 10%.
Example One: 100 customers
[
\frac{100}{1+(100 \times 0.01)}
\frac{100}{2}
50
]
The calculated sample size is 50 customers.
Example Two: 400 imports
[
\frac{400}{1+(400 \times 0.01)}
\frac{400}{5}
80
]
The calculated sample size is 80 imports.
Where a calculation does not produce a whole number, the treatment of the final sample count should be confirmed with the independent auditor.
The sample is not simply random.
The Decision requires the sample to include customers, sales agreements and imports with the highest relevant transaction values during the Tax Period.
This is important. A business cannot prepare only its smallest and simplest transactions for inspection. High-value transactions will be central to the Agreed-Upon Procedures (AUP) Report.
The auditor may also have separate sample populations for different procedures:
- Total relevant customers;
- Total relevant sales agreements; and
- Total relevant imports.
Details of the samples selected must be included in an appendix to the report. Each procedure must also describe the evidence obtained, timing, extent of work and factual findings.
Sample Preparation Card
Do not wait for the auditor to identify your largest transactions.
At the end of every month, maintain:
Customers ranked by total distribution value
Sales agreements ranked by transaction value
Imports ranked by transaction value
A complete evidence pack for the highest-value items
FTA Decision No. 6 of 2026 compliance deadline
The official wording of the Decision is important. The Agreed-Upon Procedures (AUP) Report must be submitted no later than 30 days following the deadline to file the Corporate Tax return for the relevant Tax Period, unless another date is determined by the FTA.
The deadline is therefore linked to the statutory return filing deadline, not simply to the date on which the business happens to submit its return.
Corporate Tax returns are generally due within nine months from the end of the relevant Tax Period. (Federal Tax Authority)
Illustrative timeline for a calendar-year business
Tax Period begins
1 January 2026
Tax Period ends
31 December 2026
General Corporate Tax return deadline
30 September 2027
AUP submission deadline
30 October 2027
This timeline assumes that no special extension, alternative deadline or other direction applies.
A company may file its Corporate Tax return in August 2027, but that early filing would not, based on the wording of the Decision, appear to move the AUP deadline to 30 days after the August submission. The legal deadline remains connected to the return filing deadline unless the FTA determines otherwise. Businesses should confirm the applicable date for their specific Tax Period.
What happens if the Agreed-Upon Procedures (AUP) Report is not submitted?
The Decision states that if the required report is not submitted, the relevant conditions in Ministerial Decision No. 84 of 2025 and Ministerial Decision No. 229 of 2025 will not be considered met.
This is more serious than a missing supporting attachment. It affects whether the business can demonstrate that the distribution activity satisfies the conditions prescribed for the Free Zone Corporate Tax treatment.
Ministerial Decision No. 229 of 2025 separately states that a Qualifying Free Zone Person that fails to satisfy the relevant QFZP conditions can cease to be a Qualifying Free Zone Person from the beginning of the relevant Tax Period and for the following four Tax Periods. The precise consequence of a reporting failure should be assessed against the company’s complete facts and the applicable legislation, but the potential exposure makes early compliance essential.
At NNCA, we would not advise a business owner to regard this as a form that can be completed after year-end. The quality of the final report depends on records created throughout the Tax Period.
Risk Warning
Failure to prepare the report may place more than one transaction at risk. Depending on the facts and application of the wider QFZP conditions, the business may face:
- Reclassification of income;
- Exposure to Corporate Tax at the applicable rate;
- Questions regarding QFZP eligibility;
- Additional professional and remediation costs; and
- Greater difficulty supporting its position during an FTA review.
A practical 10-step compliance plan for Qualifying Free Zone Persons
The best response to FTA Decision No. 6 of 2026 is to build the evidence requirement into normal business operations.
Step 1: Confirm whether your activity is within the scope
Review your licence, actual operations, customer categories, supply chain and tax treatment. A company’s licence may say “general trading,” but the tax analysis must also consider what the company actually does.
Step 2: Confirm Designated Zone status
Obtain and retain appropriate confirmation from the relevant Free Zone Authority. Do not assume that every Free Zone, port or warehouse location has the required status.
Step 3: Update customer onboarding
Before granting trading terms or completing a qualifying distribution sale, collect the customer’s valid licence and identify the specific licensed activity that supports resale or processing.
Step 4: Introduce a reseller declaration
Prepare a clear declaration for the relevant Tax Period. It should identify:
- The legal name of the customer;
- Licence number;
- Relevant goods or categories;
- Intended sale, resale or processing purpose;
- Relevant Tax Period;
- Authorised signatory;
- Signature; and
- Date.
The declaration should not contain broad language that has no connection to actual transactions.
Step 5: Improve contracts and purchase orders
Where commercially appropriate, include terms describing the intended onward sale or qualifying use. Avoid relying on vague invoice descriptions such as “goods,” “items” or “materials.”
Step 6: Create an import evidence pack
For every relevant import, connect the customs declaration, transport document, supplier invoice, purchase contract, clearance record and internal goods-received note.
Step 7: Reconcile warehouse and accounting records
Inventory quantities, stock codes, dates and locations should agree with customs and sales data. Any differences should be explained and documented.
Step 8: Maintain three master registers
The Agreed-Upon Procedures (AUP) Report may use separate populations. Maintain:
- A customer register;
- A sales agreement register; and
- An import register.
Each register should include transaction values so that the highest-value items can be identified.
Step 9: Perform quarterly readiness reviews
Do not discover in the final month that a major customer’s declaration is missing or that a high-value import has no Designated Zone evidence. Review the largest transactions every quarter.
Step 10: Engage the independent auditor early
Discuss the population data, evidence format, sample calculation, timing and report preparation before the Corporate Tax filing season. Early discussion does not replace the auditor’s independence or procedures. It simply helps the business maintain records in a usable form.
Suggested responsibility chart for FTA Decision No. 6 of 2026
A common problem is that everyone assumes the finance department is responsible for all tax evidence. In reality, the required documents may be held by five different teams.
| Team | Main responsibility |
|---|---|
| Sales | Customer purpose, contract and declaration |
| Credit control | Valid customer licence and renewal |
| Procurement | Supplier contract and purchase records |
| Customs and logistics | Import, transport and clearance evidence |
| Warehouse | Receipt, storage and goods movement |
| Finance | Transaction reconciliation and master registers |
| Management | Oversight and timely auditor engagement |
| Independent auditor | Prescribed procedures and factual findings |
For Qualifying Free Zone Persons, management should appoint one internal owner to coordinate these departments. Without a central owner, documents are often collected but cannot be connected to the same transaction.
Red, amber or green: Is your business ready?
GREEN - Better prepared
- Current customer licences are available.
- Period-specific reseller declarations are signed.
- Agreements and invoices contain clear descriptions.
- Customs and shipping documents agree.
- Designated Zone status has been confirmed.
- Warehouse records can be linked to imports.
- High-value populations can be generated quickly.
- An independent auditor has been contacted.
AMBER - Work is required
- Customer documents exist but are stored in different locations.
- Some declarations are old or undated.
- High-value sales can be identified only through manual work.
- Warehouse descriptions differ from customs descriptions.
- The Free Zone location is assumed to be designated, but no confirmation is retained.
- Some imports have incomplete logistics files.
RED - Immediate attention needed
- The company cannot identify which customers are resellers.
- Customer licences are missing.
- No reseller declarations are available.
- Import records do not show entry through a Designated Zone.
- Inventory movement cannot be traced.
- The company plans to prepare everything after filing the tax return.
- Management believes the annual audit automatically replaces the Agreed-Upon Procedures (AUP) Report.
Common mistakes under FTA Decision No. 6 of 2026
Mistake 1:
Believing that every B2B customer is a reseller
A corporate customer may purchase goods for its own consumption. Its legal status as a company does not, by itself, prove resale.
Mistake 2:
Collecting a declaration without checking the licence
A declaration saying “we are a reseller” may conflict with the customer’s licensed activities. The documents must support each other.
Mistake 3:
Using one permanent declaration
The auditor must check whether the declaration relates to the relevant Tax Period. Build periodic confirmation into customer compliance.
Mistake 4:
Treating every Free Zone as a Designated Zone
Formal Designated Zone status must be verified. The name “Free Zone” on a document is not sufficient by itself.
Mistake 5:
Maintaining customs documents but no internal movement records
The procedures also include warehouse, inventory, handling and logistics evidence.
Mistake 6:
Preparing only low-value samples
The prescribed sampling method requires inclusion of the highest-value customers, agreements and imports.
Mistake 7:
Waiting until the Corporate Tax return is filed
Missing evidence cannot always be recreated. A former customer may not respond. A renewed trade licence may not prove the previous period. Logistics records may be archived or held by a third party.
Mistake 8:
Assuming that the auditor will create the evidence
The auditor examines records and reports factual findings. Management remains responsible for maintaining the records needed to demonstrate compliance.
Frequently asked questions about Qualifying Free Zone Persons and the new report.
Does every Free Zone business require an Agreed-Upon Procedures (AUP) Report?
No. The Decision specifically addresses Qualifying Free Zone Persons engaged in the qualifying activity of distributing goods or materials in or from a Designated Zone.
Can our existing statutory auditor prepare the report?
Yes, provided the auditor satisfies the independence, licensing and other applicable requirements. The Decision also permits another independent auditor licensed in the UAE.
Is the AUP Report the same as our annual audited financial statements?
No. The annual audit covers the financial statements. The AUP engagement performs specified procedures and reports factual findings relating to the prescribed distribution conditions.
Does the customer have to resell the goods without making any changes?
Not necessarily. The prescribed activity can include a customer that processes or alters the goods or materials for sale or resale.
Is a signed declaration enough?
A signed declaration is important, but the Decision also prescribes inspection of licences and transactional records. A strong file should contain consistent evidence from more than one source.
What happens where the goods were purchased inside the UAE and were not imported by us?
The specific Designated Zone import test applies where goods entering the UAE are imported by the Qualifying Free Zone Person. The complete treatment should still be reviewed based on the facts of the distribution arrangement.
Can the auditor select random transactions?
The formula determines the sample size, but the sample must include the highest-value relevant customers, agreements and imports. It is therefore not a purely random selection.
When is the report due?
The report is due no later than 30 days following the deadline for filing the Corporate Tax return for the relevant Tax Period, unless the FTA determines another date.
Does early filing of the Corporate Tax return create an earlier AUP deadline?
The official Decision refers to the Corporate Tax return filing deadline, rather than the actual filing date. Businesses should calculate the report date using the applicable statutory deadline and confirm any exceptional timeline with their adviser.
Does failing to submit the report automatically result in only 9% tax on one transaction?
The Decision states that the specified conditions will not be considered met. The wider effect must be assessed under the complete QFZP framework, and it may have consequences beyond one transaction.
Nair & Nelliyatt Chartered Accountants offers a comprehensive range of accounting and professional services in Dubai — covering accounting and bookkeeping, internal and external audit, VAT consultancy, UAE Corporate Tax advisory, AML compliance, payroll outsourcing, CFO services, and business setup consultancy. We serve businesses across the Dubai mainland and all major free zones.
The UAE regulatory environment has become increasingly complex with the introduction of Corporate Tax in 2023, IFRS-aligned reporting requirements, mandatory VAT compliance, and AML obligations for many business types. Working with a qualified accounting consulting firm ensures you meet all statutory obligations accurately, avoid penalties, and make financially sound decisions based on reliable data.
An external audit is an independent examination of your financial statements conducted by approved auditors — typically required for statutory purposes, such as company renewals, bank submissions, and free zone compliance. An internal audit is an ongoing review of your internal controls, risk management practices, and operational efficiency. Both are essential components of sound financial governance. As experienced accountants & auditors in Dubai, NNCA provides both services.
Look for a firm approved by the relevant authorities (ICAI, FTA, DED), with demonstrable experience in your industry, transparent pricing, and a dedicated point of contact. Nair & Nelliyatt Chartered Accountants meets all of these criteria — and we offer free preliminary consultations so you can assess our approach before committing.
Only for those qualified to pay corporate tax. UAE Corporate Tax applies to all juridical persons incorporated in the UAE and to foreign entities with a permanent establishment in the UAE, for financial years starting on or after 1 June 2023. The standard rate is 9% on taxable income exceeding AED 375,000. Free zone entities may qualify for a 0% rate subject to specific conditions. NNCA's corporate tax team can assess your situation and ensure full compliance.
Nair & Nelliyatt Chartered Accountants offers a comprehensive range of accounting and professional services in Dubai — covering accounting and bookkeeping, internal and external audit, VAT consultancy, UAE Corporate Tax advisory, AML compliance, payroll outsourcing, CFO services, and business setup consultancy. We serve businesses across the Dubai mainland and all major free zones.
The UAE regulatory environment has become increasingly complex with the introduction of Corporate Tax in 2023, IFRS-aligned reporting requirements, mandatory VAT compliance, and AML obligations for many business types. Working with a qualified accounting consulting firm ensures you meet all statutory obligations accurately, avoid penalties, and make financially sound decisions based on reliable data.
An external audit is an independent examination of your financial statements conducted by approved auditors — typically required for statutory purposes, such as company renewals, bank submissions, and free zone compliance. An internal audit is an ongoing review of your internal controls, risk management practices, and operational efficiency. Both are essential components of sound financial governance. As experienced accountants & auditors in Dubai, NNCA provides both services.
Look for a firm approved by the relevant authorities (ICAI, FTA, DED), with demonstrable experience in your industry, transparent pricing, and a dedicated point of contact. Nair & Nelliyatt Chartered Accountants meets all of these criteria — and we offer free preliminary consultations so you can assess our approach before committing.
Only for those qualified to pay corporate tax. UAE Corporate Tax applies to all juridical persons incorporated in the UAE and to foreign entities with a permanent establishment in the UAE, for financial years starting on or after 1 June 2023. The standard rate is 9% on taxable income exceeding AED 375,000. Free zone entities may qualify for a 0% rate subject to specific conditions. NNCA's corporate tax team can assess your situation and ensure full compliance.
How NNCA can help with FTA Decision No. 6 of 2026
At NNCA, we help UAE business owners turn a detailed legal requirement into a practical working process. We begin by understanding your actual distribution model. We review where goods enter the UAE, where they are stored, who purchases them, what the customer does with them and how each transaction is recorded. Our support can include:
- Reviewing whether the new requirement is relevant to your activity;
- Mapping the customer and import evidence required;
- Creating customer onboarding and reseller-documentation controls;
- Reviewing transaction descriptions and record consistency;
- Preparing customer, agreement and import population registers;
- Identifying documentation gaps before the reporting deadline;
- Coordinating the compliance timetable with management; and
- Supporting the AUP process with an appropriately independent and licensed auditor, subject to applicable independence requirements.
The objective is not merely to prepare another report. Our objective is to help you maintain a reliable evidence system throughout the Tax Period.
Conclusion: Protect the 0% benefit through evidence, not assumptions
FTA Decision No. 6 of 2026 brings one clear message for affected Free Zone distributors: the 0% Corporate Tax benefit must be supported by verifiable transaction evidence.
For Qualifying Free Zone Persons, the strongest approach is to start with customer onboarding, customs documentation, inventory records and high-value transaction registers. The final Agreed-Upon Procedures (AUP) Report should be the result of an organised year-long process—not a last-minute search for old licences and shipping documents.
At NNCA, we recommend beginning the readiness review now. The earlier your business identifies missing declarations, inconsistent import records or unclear customer activities, the more time you have to correct the process before the reporting deadline.
Is your Free Zone distribution activity ready for FTA Decision No. 6 of 2026?
Speak with NNCA for a focused compliance-readiness review. We will help you identify documentation gaps, organise your transaction evidence and prepare your business for the Agreed-Upon Procedures process.
Review Your AUP Readiness With NNCA
Research and legal note
This blog is based primarily on the FTA’s published unofficial English translation of Federal Tax Authority Decision No. 6 of 2026, Ministerial Decision No. 84 of 2025, Ministerial Decision No. 229 of 2025 and official FTA Corporate Tax material. The English version of the Decision is marked as an unofficial translation. The supplied CLA Emirates reference was also reviewed as a secondary industry commentary. (claemirates.com/)
This article provides general information and does not replace advice based on the facts, transactions and legal position of a specific business.
