Free Zone Qualifying Income Checker
Check whether your non-qualifying revenue stays within the De Minimis threshold for the 0% corporate tax rate.
Based on the De Minimis Rule under Federal Decree-Law No. 47 of 2022: non-qualifying revenue must not exceed the lower of 5% of total revenue or AED 5,000,000. This checks the revenue threshold only — QFZP status also requires adequate substance and qualifying-activity income, which this tool doesn't assess. Not tax advice — confirm with a qualified advisor.
How the De Minimis threshold works
| Total revenue | De Minimis threshold (lower of 5% or AED 5m) |
|---|---|
| AED 10,000,000 | AED 500,000 (5%) |
| AED 50,000,000 | AED 2,500,000 (5%) |
| AED 100,000,000 | AED 5,000,000 (5% = AED 5m cap) |
| AED 200,000,000+ | AED 5,000,000 (capped, no longer 5%) |
Once total revenue passes AED 100 million, 5% of revenue would exceed AED 5 million — so the AED 5 million cap takes over as the binding limit, not the percentage.
Frequently Asked Questions
What is the De Minimis threshold for free zone companies?
Non-qualifying revenue must not exceed the LOWER of 5% of your total revenue or AED 5,000,000 in a tax period. Stay within that and you keep your Qualifying Free Zone Person (QFZP) status; go over it and you lose the 0% rate entirely for that period.
What happens if I breach the threshold?
You lose QFZP status for the current tax period and the following 4 tax periods — 5 years in total. During that time, ALL of your income is taxed at the standard 9% rate, not just the excess non-qualifying portion.
Is this a profit test or a revenue test?
It's a revenue test, not a profit test — the calculation uses your gross non-qualifying revenue against total revenue, regardless of margins. This is one of the most common points of failure because businesses often think in terms of profit.
What counts as non-qualifying revenue?
Revenue from excluded activities, or from activities that aren't on the qualifying list where the other party is a non-free-zone person. Common examples include most B2C sales, banking, insurance, and certain mainland transactions outside a qualifying activity.
Does meeting the De Minimis threshold guarantee QFZP status?
No — this is one of several conditions. You also need adequate substance in the free zone (assets, qualified employees, operating expenditure), income from qualifying activities, and compliance with transfer pricing rules. This checker covers the revenue threshold only.
Is this checker professional tax advice?
No. It applies the published De Minimis threshold to the figures you enter as a screening aid. Activity classification and substance requirements are genuinely complex — confirm your specific position with a qualified tax advisor.
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