For Qualifying Free Zone Persons carrying out distribution activities in or from a Designated Zone, the evidence supporting the 0% Corporate Tax position has become more formal.
Under FTA Decision No. 6 of 2026, qualifying businesses must obtain an independent Agreed Upon Procedures (AUP) report and submit it to the Federal Tax Authority.
The change moves the process from self certification towards independent verification by a UAE licensed auditor.
What Does the AUP Report Need to Establish?
The AUP engagement must be conducted in accordance with ISRS 4400 and should document the procedures performed and the factual findings identified. Unlike a traditional audit opinion, the auditor does not provide assurance or an opinion through the AUP report.
For the relevant distribution activity, the procedures must demonstrate two key facts.
First, customers receiving the goods or materials must acquire them for resale, or for processing or alteration for subsequent sale or resale.
Second, where the QFZP itself imports the goods into the UAE, those goods must enter through a Designated Zone.
Documentation Becomes Important Throughout the Year
The Decision also makes record keeping particularly important.
Businesses may need to maintain customer trade licences, reseller declarations, sales agreements and transactional records to support reseller status. Where goods are imported, customs declarations, shipping documents, confirmation of Designated Zone status and internal logistics records may also form part of the evidence reviewed.
This means preparation for the AUP report should not begin only at the end of the Tax Period. The supporting evidence needs to be built and maintained as transactions take place.
When Does the Requirement Apply?
The Decision applies to Tax Periods beginning on or after 1 January 2026.
The AUP report is due 30 days after the Corporate Tax Return filing deadline, unless another date is specified by the FTA.
For affected businesses, the practical priority is therefore to identify the relevant income streams, understand the populations that will be tested, organise the required documentation and coordinate with the auditor early.
Preparing for the First AUP Filing
The guide identifies five practical steps for businesses:
Map the relevant exposure. Build the evidence trail. Engage the auditor early. Understand the sampling population. Include the AUP deadline in the compliance calendar.
Taking these steps throughout the year can make the eventual AUP engagement more structured and ensure the required records are available when testing begins.
How MCA Gulf Can Help
MCA Gulf can support businesses in assessing their QFZP position, establishing the required documentation framework and coordinating the ISRS 4400 engagement.
For a working session, contact us.
Download the Guide
Download our guide for a detailed overview of FTA Decision No. 6 of 2026, the AUP requirements and the documentation and procedures relevant to Designated Zone distribution activities.
