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Quick answer
If your free zone company is a Qualifying Free Zone Person (QFZP) claiming the 0% Corporate Tax rate, you must prepare and maintain audited financial statements — regardless of revenue. Under Ministerial Decision 84 of 2025 there is no revenue floor and no small-business carve-out: even a dormant or minimal-activity QFZP needs the audit, because it’s a condition of QFZP status, not a size threshold. Don’t confuse this with Small Business Relief — which does skip the audit, but is not available to a QFZP. And the stakes are high: failing the audit condition can cost you QFZP status and put you on 9% for that period and the next four.
One of the most expensive misunderstandings in the free zone world right now is this: “we had almost no revenue, so we don’t need an audit.” For a genuine small business that’s often true — but if you’re claiming the free zone 0% rate as a Qualifying Free Zone Person, it’s exactly wrong. The audit isn’t triggered by how much you earned; it’s the price of the 0%.
The rule
Every QFZP needs an audit — revenue is irrelevant
Under Ministerial Decision 84 of 2025 (for tax periods starting on or after 1 January 2025), a Qualifying Free Zone Person must prepare and maintain audited financial statements regardless of its revenue. There is no minimum threshold for free zone entities and no small-business exemption. Whether you turned over millions or nothing at all, if you’re a QFZP, the audit applies.
Why nil revenue makes no difference
It’s a status condition, not a size test
Audited financial statements are one of the five conditions a free zone company must meet in every tax period to be a QFZP and enjoy 0% on qualifying income — alongside adequate substance, qualifying income, the de minimis limit and transfer-pricing compliance. Because the audit is a condition of the status, it’s status-based, not size-based. A dormant or barely-active QFZP is just as required to have the audit as a large one — the 0% comes with the audit, not instead of it.
The trap
QFZP is not Small Business Relief — don’t mix them up
You can’t claim QFZP 0% and skip the audit via SBR
Small Business Relief (SBR) — for companies with revenue up to AED 3 million — treats you as having zero taxable income and exempts you from preparing audited financial statements. Tempting for a low-revenue company. But SBR is not available to a Qualifying Free Zone Person. So a free zone company can’t have it both ways: claim the QFZP 0% regime and use SBR to avoid the audit. You choose one lane — QFZP (0% on qualifying income, audit mandatory) or a non-QFZP small business on SBR (0% via relief, no audit) — and your free zone/QFZP position has to be checked before you assume which applies.
The stakes
Skipping the audit can cost the 0% for five years
The audit isn’t optional housekeeping — it’s load-bearing. Failing any QFZP condition, including the audit, loses your QFZP status, and the consequence is severe: the 9% rate applies to your taxable income for that period and the following four tax periods — five periods in total. Saving an audit fee to “keep costs down” on a low-revenue company can therefore forfeit the very 0% you were trying to protect.
What it involves
The audit for a near-dormant QFZP
Even where activity is minimal, the work is real but proportionate: preparing the financial statements under the applicable accounting standards, an audit by a UAE-licensed auditor, reconciling the company’s bank account (even a closed one), and issuing an independent auditor’s report for Corporate Tax / QFZP purposes — covering the full period, even if it’s only a handful of expense transactions. It’s a compact engagement for a quiet company, but it must still be done properly to hold up your status.
What to do
Check your lane, then get the audit done
- Confirm whether you’re actually claiming QFZP status. Free zone registration alone doesn’t make you a QFZP — the five conditions must be met.
- If you’re on the QFZP 0% regime, arrange audited financial statements for the period, regardless of revenue — don’t leave it to the return deadline.
- If you’re better off as a non-QFZP small business on SBR, that’s a separate analysis — but it’s a decision to make deliberately, not by defaulting to “no revenue, no audit.”
QFZP with little or no revenue? You still need the audit — we’ll handle it.
As MoE-approved auditors, we prepare and audit your financial statements for Corporate Tax / QFZP purposes — proportionate for a quiet company, but done properly so your zero-rate QFZP status holds. We’ll also confirm whether QFZP or Small Business Relief is the right lane for you.
Related reading
Zero revenue doesn’t mean zero obligations: the compliance myths →Corporate tax: the 0% QFZP rate & what qualifies →Related Fastlane services
FAQ
Does a QFZP need an audit if it had no revenue?
Yes. Under Ministerial Decision 84 of 2025, a Qualifying Free Zone Person must prepare and maintain audited financial statements regardless of revenue. There is no revenue floor and no small-business carve-out, so even a dormant or minimal-activity QFZP claiming the 0% rate must have the audit — it is a condition of the status, not a size threshold.
Why does the audit apply even to a dormant free zone company?
Because audited financial statements are one of the five conditions a free zone company must meet in every tax period to be a Qualifying Free Zone Person and enjoy 0% on qualifying income. The audit is status-based, not size-based, so it applies whether the company turned over millions or nothing at all. The 0% comes with the audit, not instead of it.
Can I use Small Business Relief to avoid the audit as a free zone company?
Not if you are claiming QFZP status. Small Business Relief exempts qualifying small businesses (revenue up to AED 3 million) from preparing audited financial statements, but SBR is not available to a Qualifying Free Zone Person. So a free zone company cannot claim the QFZP 0% regime and use SBR to skip the audit — it must choose one lane, and check its QFZP position first.
What happens if a QFZP doesn't have audited financial statements?
Failing any QFZP condition, including the audit, loses QFZP status. The consequence is that the 9% Corporate Tax rate applies to the company’s taxable income for that tax period and the following four periods — five periods in total. Skipping the audit to save cost on a low-revenue company can therefore forfeit the 0% it was meant to protect.
What does a QFZP audit involve for a company with barely any activity?
It is proportionate but complete: preparing the financial statements under the applicable accounting standards, an audit by a UAE-licensed auditor, reconciling the company’s bank account even if it has been closed, and issuing an independent auditor’s report for Corporate Tax and QFZP purposes covering the full period — even where there are only a handful of expense transactions.
How do I know if I'm a QFZP or should be on Small Business Relief?
Free zone registration alone does not make you a QFZP — the five QFZP conditions must all be met in the period. Whether QFZP status (0% on qualifying income, audit mandatory) or Small Business Relief (0% via relief, no audit, but not available to a QFZP) is right for you is a deliberate analysis to do before you file, not something to default to based on revenue. A tax adviser can confirm which lane applies.
General guidance on QFZP audit requirements, current as of September 2026; not tax advice. Based on Federal Decree-Law 47 of 2022 (Article 18), Cabinet Decision 100 of 2023, and Ministerial Decisions 84 of 2025 and 229 of 2025, and Ministerial Decision 73 of 2023 (Small Business Relief). QFZP conditions and eligibility depend on your facts and may change — confirm your position with a qualified tax adviser before acting.