Free zone guide · Dubai
IFZA corporate tax: when the 0% rate actually applies
International Free Zone Authority (IFZA) is one of the most popular budget-friendly zones for SMEs, consultants and startups, known for low-cost licences and flexi-desks. Since June 2023, a IFZA company keeps 0% corporate tax only as a Qualifying Free Zone Person (QFZP) — and only on qualifying income. Everything else is taxed at 9%, with no AED 375,000 free band.
IFZA at a glance
| Emirate | Dubai |
|---|---|
| Designated zone (goods distribution) | No |
| Rate on qualifying income | 0% |
| Rate on non-qualifying income | 9% (no 375K band) |
| Audited accounts required for QFZP | Yes — always |
What this means for typical IFZA businesses
IFZA's typical resident — a small consultancy or service business invoicing mainland clients — usually does NOT have qualifying income, and a flexi-desk alone rarely satisfies the substance test. Many IFZA companies are better off simply using the standard 0%/9% bands (and Small Business Relief while it lasts) than assuming free-zone 0%.
Estimate your position
Use the corporate tax calculator with the Free Zone toggle to model your qualifying/non-qualifying split, and see the full free-zone guide for the qualifying-activity list.
General information, not tax advice. QFZP analysis depends on your specific facts — confirm with a licensed UAE tax agent.