How the 5% De Minimis Revenue Cap Works for Free Zone Entities
Editorial responsibility: Valusage Business Advisors Technical Practice (Organization)
Direct answer
Calculating non-qualifying mainland sales to prevent losing 0% Free Zone Corporate Tax status.
Free Zone companies that generate revenue from non-qualifying activities must keep this income below 5% of total revenue or AED 5,000,000.
Professional boundary
This article is general information. It is not a filing opinion, legal advice, audit conclusion, investment recommendation or guarantee of authority acceptance or commercial outcome.
What is the practical purpose of this guidance?+
It helps management understand the issue described in “How the 5% De Minimis Revenue Cap Works for Free Zone Entities”, identify the information that matters and decide whether a fact-specific review is needed.
Does this guidance determine the treatment for a specific UAE business?+
No. The appropriate accounting, tax or commercial treatment depends on the entity’s facts, evidence and current rules. A written scope is required for entity-specific work.
Apply the guidance to a defined requirement
Describe the entity, question, deadline and information available. Submitting an enquiry does not create an engagement.