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FTA DECISION NO. 6 OF 2026
New AUP Reporting Requirement for Qualifying Free Zone Persons Distributing Goods from a Designated Zone
Effective for Tax Periods commencing on or after 1 January 2026
The Federal Tax Authority has issued Decision No. 6 of 2026, and for one specific group of Free Zone businesses, it changes what "staying compliant" actually requires. If your Qualifying Free Zone Person (QFZP) status rests on distributing goods or materials in or from a Designated Zone — a Qualifying Activity under Ministerial Decision No. 229 of 2025 — you now have a new, mandatory annual deliverable with a fixed deadline and a real consequence for missing it.
Here's what changed, who it affects, and what to do about it before your next Corporate Tax filing.
Who This Applies To
This applies to QFZPs whose Qualifying Activity is distributing goods or materials in or from a Designated Zone. If your Free Zone entity's 0% Corporate Tax position depends on that activity, the new procedure sits on top of — not instead of — your existing substance, audited financials, and de minimis obligations.
The New Requirement: An Agreed-Upon Procedures Report
Under Clause 3, Article 2 of Ministerial Decision No. 84 of 2025, a QFZP running this activity must now obtain an Agreed-Upon Procedures (AUP) report from an independent auditor — either the entity's statutory auditor or another UAE-licensed auditor — prepared under ISRS 4400.
Important distinction: An AUP engagement is a factual-findings report, not an audit opinion. The auditor reports what they found; your business remains responsible for actually meeting the underlying conditions.
The report has to demonstrate two things: that your customers genuinely resell, process, or alter what you supply to them, and that anything you import entered the UAE through a Designated Zone.
Documentation You'll Need
- Trade/commercial licenses showing your customers genuinely resell
- Signed customer declarations confirming goods are for sale, resale, or donation
- Sales agreements, invoices, and purchase orders evidencing resale
- Import declarations, customs clearance, bills of lading confirming Designated Zone entry
What the Auditor Will Test
Customer Licensing
Inspects trade licenses for resale-consistent activity.
Declarations
Verifies signed, dated declarations tied to the Tax Period.
Sales Records
Reviews agreements and invoices for resale indicators.
Import Trail
Confirms Designated Zone entry via customs documentation.
Zone Confirmation
Verifies Designated Zone status with the Free Zone Authority.
Internal Records
Checks inventory logs and goods movement records.
Sample Size Isn't Left to Judgement
The Decision fixes the sampling formula rather than leaving it to the auditor:
Key Dates
Decision No. 6 of 2026 issued
Applies to Tax Periods commencing on or after this date — already in effect for calendar-year filers
AUP report must be submitted to the FTA
QFZP status for this activity is treated as not met — 0% rate is at risk on the related income
How HAS Global Tax Consultants Can Help
At HAS Global Tax Consultants, our experienced team provides expert guidance across every stage of this new requirement — from Corporate Tax and VAT compliance to administrative penalty assessments and dispute resolution.
We assist clients in evaluating how the new decision may affect their tax position, and in building the documentation trail an ISRS 4400 engagement requires well before the filing deadline. Our QFZP assessment service is a good starting point if you're not yet certain this Decision applies to your Free Zone entity.
Not Sure If This Applies to You?
If your Free Zone entity distributes goods and relies on this Qualifying Activity, an early readiness review saves you from scrambling near your filing deadline.
Schedule a Consultation+971 54 220 1100·info@hasglobaltax.com·Al Saqr Business Tower, Sheikh Zayed Road, Dubai
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