Aqid ERPMeaning
A Qualifying Free Zone Person (الشخص المؤهل في المنطقة الحرة) is a company in a UAE free zone that meets every condition the corporate tax law sets for the whole tax period, and so pays 0% on its qualifying income and 9% on the rest of its taxable income. It still registers and files like any other taxable person.
The conditions: adequate substance in the free zone, qualifying income, no election for the standard rates, arm's-length dealings with related parties, audited financial statements, and non-qualifying revenue within the de minimis limit of 5% of total revenue or AED 5,000,000, whichever is lower. The first AED 375,000 band at 0% and Small Business Relief do not apply to it. A company that fails a condition loses the status for that period and the four after it.
Also called: QFZP · free zone corporate tax
Example
A JAFZA trading company has AED 7,300,000 of revenue, AED 500,000 of it from transactions that do not qualify: 6.85%, above the AED 365,000 the de minimis test allows. It fails, and is taxed at the standard rates for this year and the next four.