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BSABLLC · Dubai
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International Tax7 min read

Holding your 0% — substance and TP for Qualifying Free Zone Persons

The 0% Free Zone rate is conditional. Substance and transfer pricing alignment are what keep it.

The 0% Corporate Tax rate available to Qualifying Free Zone Persons is a genuine advantage — but it is conditional, not automatic. Two conditions decide whether it holds: adequate substance, and transfer pricing that reflects the value actually created in the Free Zone.

Substance is a question of reality

Adequate people, premises and decision-making must sit where the income is booked. A structure that looks right on paper but lacks real activity is the first thing an audit unpicks.

Transfer pricing ties it together

Related-party flows in and out of the Free Zone must be priced at arm's length and documented. Done well, your TP file is also the evidence that your 0% status is earned.

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