QFZP de minimis calculator
A Qualifying Free Zone Person keeps its 0% corporate tax rate only if its non-qualifying revenue is no more than 5% of total revenue or AED 5 million, whichever is lower. Failing the test means standard 9% rates on all taxable income for that tax period and the following four.
Reviewed by Countify's ACCA/FCCA chartered certified accountants · Updated
Leave out revenue from qualifying activities, excluded activities with other free zone persons, and the property and IP revenue the test ignores.
- De minimis limit (lower of 5% and AED 5m)
- AED 600,000.00
- Non-qualifying share of revenue
- 3.75%
- Headroom left
- AED 150,000.00
- De minimis test passed
- Yes
You pass this test. You must also meet the substance, audited accounts, transfer pricing and no-election conditions to keep the 0% rate.
Results are estimates for general information, not tailored advice.
De minimis limits by revenue
The limit is 5% of revenue, capped at AED 5 million.
| Revenue | De minimis limit (lower of 5% and AED 5m) |
|---|---|
| AED 2,000,000 | AED 100,000.00 |
| AED 12,000,000 | AED 600,000.00 |
| AED 100,000,000 | AED 5,000,000.00 |
| AED 250,000,000 | AED 5,000,000.00 |
The cap bites from AED 100 million of revenue.
What counts as non-qualifying revenue
Revenue from qualifying activities (manufacturing, trading of qualifying commodities, logistics, treasury and financing to related parties, headquarters services and others) and from transactions with other free zone persons is qualifying. Most revenue from mainland customers for services is non-qualifying. Revenue from immovable property and certain intellectual property is excluded from the test altogether.
The other QFZP conditions
De minimis is one of several conditions. A QFZP must also keep adequate substance in the free zone, prepare audited financial statements, follow the transfer pricing rules and not elect to be taxed at standard rates. Our QFZP guide covers each one.
Legal basis
We review this calculator whenever the FTA or Ministry of Finance issues a new decision or clarification.
Frequently asked questions
What is the de minimis rule for free zone companies?
Non-qualifying revenue must not exceed the lower of 5% of total revenue or AED 5 million in the tax period.
What happens if I fail the de minimis test?
You lose QFZP status for that period and the next four, so all taxable income is taxed at 0% up to AED 375,000 and 9% above for 5 tax periods.
Is mainland revenue always non-qualifying?
Not always. Some activities, such as certain distribution from a designated zone, can be qualifying even with mainland customers. Check each revenue stream.
Corporate tax registration and returns
We register you, prepare the tax computation and file your corporate tax return, with Small Business Relief, QFZP and loss elections handled correctly.