Manage VAT, corporate tax with QFZP qualifying income separation, WPS payroll, SIF files and audit-ready reports — purpose-built for companies in UAE free zones.
Separate qualifying and non-qualifying income at transaction level. Know your corporate tax position at any time — not just at year-end when it is too late to adjust.
Most UAE free zones are subject to standard VAT. ETaxFlow handles registration, FTA-compliant invoicing, input tax reclaim and the VAT 201 return for free zone companies.
Compute CT taxable income from accounting records. Flag non-deductible expenses. Produce the data needed for the CT300 return for both QFZP and non-QFZP free zone entities.
Pay employees and generate the UAE Wage Protection System SIF file automatically. EOSB gratuity accrued monthly per UAE Labour Law, even for free zone employees.
Supplier invoices — PDF, scan, email — are read by AI. TRN, VAT, line items extracted and matched to open purchase orders. Approve before posting to keep control.
Free zone authorities and CT auditors expect clean records. ETaxFlow keeps invoices, bank statements, payroll records and ledger entries linked — with a complete audit trail per transaction.
Free zone companies that meet the QFZP conditions benefit from 0% corporate tax on qualifying income. ETaxFlow tracks both income streams so you always know where you stand.
Assign a qualifying/non-qualifying flag to each customer, supplier and transaction. ETaxFlow aggregates the split in real time and shows your CT position before year-end.
Most free zone companies are live on ETaxFlow within one business day. Migration from your existing software or Excel is included.
Tell ETaxFlow your free zone (DMCC, JAFZA, ADGM, etc.), your FTA TRN, and whether you are electing QFZP status. We configure your chart of accounts accordingly.
Flag each customer and revenue stream as qualifying or non-qualifying. ETaxFlow tracks the split per transaction and alerts you when non-qualifying income approaches the 5% de-minimis threshold.
Your live dashboard shows qualifying income, non-qualifying income, VAT 201 position, WPS payroll status, and EOSB gratuity accruals — all updated as you post transactions.
ETaxFlow prepares the VAT 201 return, the CT300 return data with QFZP disclosure, and the WPS SIF file. Export or file directly through EmaraTax. Audit records retained for 7 years.
From single-director holding structures to 50-employee trading operations, ETaxFlow adapts to your free zone business model.
Multi-currency invoicing, landed cost tracking, inventory valuation, and QFZP income split between international and UAE mainland customers. VAT on re-exports and designated zone goods handled automatically.
Track dividends from qualifying subsidiaries, capital gains from qualifying shareholdings, and intercompany loans at arm's length. Participation exemption and transfer pricing documentation supported.
Manage qualifying intellectual property income, R&D expenditure, and software licence revenue. IP income from qualifying free zone persons tracked separately from mainland client fees.
Consultancies, law firms, and advisory practices in ADGM, DIFC and DMCC. Project-based billing, client trust account separation, and QFZP status monitoring for service income from mainland vs free zone clients.
Bill of materials, work-in-progress valuation, and production cost accounting for Jebel Ali, KIZAD, and other industrial free zones. Export sales classified as qualifying income automatically.
ADGM and DIFC-regulated entities with fund management, asset management, or payment services. Excluded activity tracking ensures non-qualifying income is properly taxed at 9% without contaminating the QFZP position.
Understanding which CT regime applies to your free zone company determines your tax liability — and whether you need QFZP income tracking.
To qualify for the 0% Corporate Tax rate on qualifying income as a Qualifying Free Zone Person (QFZP), a free zone entity must satisfy four conditions simultaneously. Failing any one of them — even for a single tax period — disqualifies the entity from QFZP status for five consecutive years.
The entity must maintain adequate substance in the free zone. This means having a genuine physical presence: qualified employees, physical premises (not just a registered address), and assets appropriate to the qualifying activities. Substance must be proportionate to the scale and nature of the business — a shelf company with one remote employee will not qualify.
The 0% rate applies only to income from permitted activities listed in Ministerial Decision No. 265 of 2023. These include manufacturing, distribution to customers outside the UAE, holding activities (dividends from qualifying subsidiaries), shipping, fund management, and certain financial services. Income from mainland UAE customers from some activities does not qualify.
Non-qualifying income must not exceed 5% of total income or AED 5 million, whichever is lower. If non-qualifying income breaches this de-minimis limit, the entire entity loses QFZP status for that period — even the qualifying income becomes taxable at 9%. ETaxFlow tracks the qualifying/non-qualifying split continuously throughout the year.
Businesses can elect to be taxed under the general 9% regime instead of the QFZP regime (e.g., to use tax losses from non-qualifying activities). This election is irrevocable for 5 tax periods once made. ETaxFlow flags this election clearly and prevents accidental opt-outs — a mistake that cannot be undone for five years.
Free zone CT compliance is not just about calculating your qualifying income split. The FTA expects you to maintain structured financial records for a minimum of 7 years — ready for inspection on short notice. ETaxFlow's archival engine organises every transaction, invoice, and payroll record by tax period automatically.
Sales contracts, invoices, and bank receipts proving your qualifying income sources — separated by permitted activity category per Ministerial Decision No. 265.
All supplier invoices, payroll records, and overhead cost documentation proving your economic substance and active operations inside the free zone.
Transfer pricing documentation for intra-group transactions, including contracts, valuation methodologies, and arm's-length benchmarking studies.
Mandatory audited financial statements for QFZP-electing entities. ETaxFlow exports trial balances and supporting schedules formatted for your licensed auditor.
A Qualifying Free Zone Person (QFZP) is a free zone entity that meets specific conditions under the UAE Corporate Tax Law to benefit from a 0% corporate tax rate on qualifying income. Conditions include maintaining adequate substance in the free zone, deriving qualifying income from permitted activities, and not electing out of the QFZP regime. Non-qualifying income is still taxed at 9%.
Most UAE free zones are not designated zones for VAT purposes, so companies in those zones must register for VAT if taxable supplies exceed AED 375,000 per year. A few free zones — including JAFZA for specific warehousing activities — are designated zones with special VAT treatment. ETaxFlow handles both scenarios: standard VAT and designated zone treatment.
UAE free zone companies that qualify as QFZPs pay 0% corporate tax on qualifying income. Non-qualifying income — such as income from UAE mainland transactions — is taxed at 9%. Non-QFZP free zone companies are treated like mainland companies: 0% on the first AED 375,000 and 9% above. ETaxFlow tracks both income streams and computes the correct CT position.
UAE free zone companies must keep records that support their corporate tax and VAT returns — including invoices, bank statements, payroll records and a general ledger — for at least 7 years. QFZP entities must also maintain records showing the split between qualifying and non-qualifying income. ETaxFlow maintains all these records with a full audit trail.
Qualifying income for QFZPs includes income from transactions with other free zone persons for permitted activities and certain passive income meeting specific conditions. Non-qualifying income includes income from UAE mainland customers, excluded activities and activities not on the permitted list. ETaxFlow separates these income streams in your chart of accounts so your CT position is always accurate.
Yes. ETaxFlow is used by companies in DMCC, JAFZA, ADGM, DIFC, RAKEZ, IFZA, Sharjah Airport Free Zone and other UAE free zones. The platform handles QFZP income separation, VAT registration and filing, WPS payroll for free zone employees and the audit-ready reports required by free zone authorities.
If non-qualifying income exceeds 5% of total income or AED 5 million (whichever is lower), the entity loses QFZP status for that entire tax period. This means all income — including income that would otherwise have been qualifying — becomes taxable at 9% for that period. ETaxFlow monitors the qualifying/non-qualifying split in real time and alerts you before the de-minimis threshold is breached so you can take corrective action early.
Yes. The UAE Wages Protection System (WPS) applies to most free zone employees, though the implementing body differs. Employees registered under MOHRE (Ministry of Human Resources) are subject to standard WPS. ADGM and DIFC have their own employment frameworks and payroll reporting requirements. ETaxFlow generates WPS SIF files for standard free zone employees and supports ADGM/DIFC payroll structures with appropriate payroll journals and EOSB gratuity calculations.
Yes, but the decision is effectively irrevocable. Once a free zone entity elects to be taxed under the standard corporate tax regime (opting out of QFZP), the election is binding for five consecutive tax periods. This may be worth considering if the entity has accumulated tax losses that would shelter taxable income — but the decision should be modelled carefully. ETaxFlow shows your projected CT position under both regimes so you can make an informed choice before the election is made.
DMCC requires member companies to maintain proper financial statements prepared in accordance with IFRS and to file audited accounts annually. Records must be kept for at least 7 years and must be sufficient to support both the FTA corporate tax return and any DMCC audit. ETaxFlow maintains a complete ledger with document-level drill-down, generates IFRS-compliant financial statements, and retains all invoices, bank statements and payroll records in a structured 7-year archive — satisfying both DMCC and FTA requirements simultaneously.
Deep-dive guides and tools for UAE free zone business compliance.
QFZP rules, qualifying income, and 0% vs 9% explained
Auto-calculate CT liability with QFZP income split tracking
Estimate your CT liability for qualifying and non-qualifying income
Step-by-step VAT filing guide for UAE free zone companies
QFZP-ready accounting with income separation and CT filing
FTA-compliant VAT invoicing and 201 return automation