The UAE Federal Tax Authority (FTA) has introduced new compliance requirements for Free Zone businesses involved in the distribution of goods and materials seeking to maintain their Qualifying Free Zone Person (QFZP) status and continue benefiting from the 0% Corporate Tax rate. From tax periods beginning on or after 1 January 2026, eligible businesses will be required to obtain an Agreed-Upon Procedures (AUP) Report issued by a licensed auditor in accordance with ISRS 4400 standards.
In this video, Hemant Mundhra explain the key conditions that distributors must satisfy, including proving that goods are sold to resellers or entities undertaking further processing activities and ensuring that imports are routed through designated Free Zone ports. He also discuss the documentation requirements, such as customer trade licenses, undertakings, sales agreements, customs records, shipping documents, warehouse logs, and inventory records that auditors will review.
Failure to submit the required AUP report within the prescribed timelines could result in the loss of QFZP status not only for the relevant tax period but also for the following four years, making compliance preparation critical for affected businesses. Watch this video to understand the latest FTA requirements and the steps your business should take to protect its Free Zone tax benefits.
With over 25 years in Dubai and nearly 30 years as a Chartered and Management Accountant, Hemant has extensive experience across manufacturing, services and technology sectors. He has worked with major corporate groups including Al Tayer, Saif Al Ghurair, Dhabi, and Aditya Birla. Hemant specializes in profitability and cost management, debt restructuring, contract management, and regulatory compliance, having generated approximately USD 47.5 million in savings and profit growth. A confident public speaker and Distinguished Communicator, he lives by the quote: “You get what you reward for. If you want ants to come, you put sugar on the floor” (Charlie Munger), embodying his belief that “Profit has its own intelligence.”
Archana Mundhra is a qualified Chartered Accountant with over 15 years of experience in multinational corporations. Her proficiency lies in financial planning and business intelligence. Her deep financial understanding and profound analytical skills empower her to assist management in realizing their objectives effectively.
Rinkle Jain is a qualified Chartered Accountant and Fellow Member of the Institute of Chartered Accountant of India. A results-driven Chartered Accountant with a distinguished career marked by proficiency in management, financial planning, and catalyzing overall company development.Demonstrates a unique blend of financial acumen, strategic insight, and leadership prowess, contributing significantly to organizational success.
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