Corporate Tax

New FTA Rule for Free Zone Distribution Businesses: Decision No. 6 of 2026

18 July 2026 · 5 min read · Nuvaris Advisory Team

The FTA has introduced a new compliance requirement specifically for free zone businesses distributing goods or materials from a Designated Zone — effective from the start of this year's tax period.

What the decision requires

Issued in June 2026, FTA Decision No. 6 adds a step for Qualifying Free Zone Persons whose qualifying activity is distributing goods or materials in or from a Designated Zone — common for trading, wholesale, and logistics businesses. These businesses must now obtain an Agreed-Upon Procedures (AUP) report from an independent external auditor confirming their qualifying activity meets the 0% regime's conditions. This is narrower than your annual statutory audit — the auditor performs defined procedures the FTA has set and reports factual findings against them.

Who this affects

Free zone companies distributing goods or materials in or from a Designated Zone

Trading, wholesale, logistics and warehousing businesses relying on the 0% QFZP rate

The requirement applies to tax periods beginning on or after 1 January 2026 — most affected businesses are already inside a covered period, even though the decision was only issued in June.

What to do now

Confirm whether your free zone activity is classified as qualifying distribution, arrange the AUP engagement with an independent auditor ahead of your filing deadline, and keep the documentation that supports your qualifying income classification.

Read FTA Decisions directly at tax.gov.ae.

This article is for general information and reflects our understanding of FTA guidance at the time of writing. It isn't tax or legal advice — always confirm how these rules apply to your specific situation before acting.

New FTA Rule for Free Zone Distribution Businesses: Decision No. 6 of 2026

Not sure if your free zone activity qualifies?