FTA TAXP010: Confirm Free Zone Status Per Tax

Brochures still sell “Free Zone equals 0% tax.” On 2 October 2026, the Federal Tax Authority (FTA) — الهيئة الاتحادية للضرائب — published Public Clarification TAXP010, Free Zones and Designated Zones for Tax Purposes. The point for property desks is practical: the labels Free Zone and Designated Zone are defined separately under Corporate Tax (ضريبة الشركات), VAT (ضريبة القيمة المضافة), and Excise Tax. Confirm which list you sit on before you brief a client on a 0% rate.

Primary: FTA TAXP010 (issue date 2 Oct 2026) on the Corporate Tax guides and public clarifications page, with the clarification landing page at tax.gov.ae TAXP010. Arabian Business’s same-weekend digest also flagged the clarification for a wider business audience — treat the FTA PDF as wording of record.

What TAXP010 asks you to check

TAXP010 states that businesses must determine whether they are located in an area that qualifies as a Free Zone and/or Designated Zone for each Tax Law separately, so they stay compliant with the relevant rules. It walks through four distinct concepts:

• Corporate Tax Free Zone — a designated geographic area specified in a Cabinet decision at the suggestion of the Minister
• Corporate Tax Designated Zone — a zone on the VAT “List of Designated Zones” that has also been included as a Free Zone under the Corporate Tax Law
• Excise Tax Designated Zone — a free zone or geographic area that meets Excise Tax Law and Executive Regulation conditions
• VAT Designated Zone — a Free Zone listed in Cabinet Decision No. 59 of 2017 (and amendments) that meets Article 51(1) of the VAT Executive Regulation

For Corporate Tax, TAXP010 underlines that a VAT Designated Zone is not automatically a Corporate Tax Designated Zone. All taxpayers should confirm with their respective Free Zone authority whether they sit in a Free Zone or Designated Zone for Corporate Tax purposes.

How the 0% Free Zone rate actually sits

FTA’s Basic Tax Information bulletin for Free Zone Persons explains that a Qualifying Free Zone Person (شخص المنطقة الحرة المؤهل) may benefit from a 0% Corporate Tax rate on Qualifying Income; other income that is not Qualifying Income is taxed at the standard 9% rate. The same bulletin notes that a Qualifying Free Zone Person does not get the mainland-style 0% band on the first AED 375,000 of Taxable Income for non-qualifying amounts — those amounts sit at 9%. Source: FTA Free Zone Person bulletin (EN).

Natural-person landlords reading this for a personal Dubai flat should not confuse the Free Zone company rules with Cabinet Decision No. 49 of 2023 / CTGREI1 (real-estate investment income of natural persons). That path was covered in Kyora’s earlier holiday-home / natural-person notes — today’s paper is about Free Zone entity status after TAXP010.

Briefing checklist for investors and agents

1. Open TAXP010 on the FTA Corporate Tax clarifications list (dated 2 Oct 2026) and read the four zone definitions as printed.
2. Ask the Free Zone authority in writing whether the licence address is a Corporate Tax Free Zone and, separately, whether it is a Corporate Tax Designated Zone — do not assume VAT Designated Zone status answers the Corporate Tax question.
3. Separate VAT and Excise maps from the Corporate Tax map when the file involves storage, distribution, or designated-zone logistics language.
4. Treat “0% Free Zone” as a Qualifying Income claim that needs substance, qualifying-income tests, and the live FTA conditions — not a slogan on a pitch deck.

Primary cites: FTA TAXP010 (2 Oct 2026) and the FTA Free Zone Person bulletin. This is orientation for reading official labels — not personal tax advice. Confirm with the FTA / a licensed tax agent before you structure a holdco or claim a 0% rate.