Maintaining QFZP Status

Maintaining QFZP Status

Substance Requirements

A QFZP must maintain adequate substance in the UAE:

1. Conduct core income-generating activities in the UAE
2. Employ adequate full-time staff
3. Incur adequate operating expenditure
4. Maintain physical offices

Annual Compliance

1. Audited financial statements — prepared annually
2. Transfer pricing documentation — if applicable
3. CT return — filed via EmaraTax
4. Income separation — qualifying vs non-qualifying

Loss of QFZP Status

A QFZP may lose its status if:

• It fails to meet the conditions
• It elects to be subject to standard CT
• The FTA revokes the status

Consequences of Loss

If QFZP status is lost:

• All income becomes subject to standard 9% rate
• The entity must re-apply for QFZP status (if desired)
• Past periods may be reassessed

Election

A QFZP may elect to be subject to the standard CT regime. This election is irrevocable for 3 years.

Best Practice

• Conduct an annual QFZP compliance review
• Maintain clear documentation of substance
• Separate qualifying and non-qualifying income in the chart of accounts
• Seek professional advice for complex transactions