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FTA Decision No. 6 of 2026 adds a new audit-style requirement for Qualifying Free Zone Persons (QFZPs) that distribute goods or materials in or from a Designated Zone. Issued by the UAE Federal Tax Authority (FTA) on 2 June 2026, it requires an independent Agreed-Upon Procedures (AUP) report. The report must show that your customers are resellers and that your imports came in through a Designated Zone.
The decision applies to tax periods starting on or after 1 January 2026. If you rely on the 0% Corporate Tax rate for qualifying free zone income, this report now sits between you and that benefit. This guide explains what the decision says, what your auditor will test, and how to prepare.
What Is FTA Decision No. 6 of 2026?
The decision sets additional procedures for QFZP compliance. It supports Clause 3 of Article 2 of Ministerial Decision No. 84 of 2025 (audited financial statements) and the distribution activity listed in Ministerial Decision No. 229 of 2025 (qualifying and excluded activities). The FTA Board approved the underlying policy on 30 April 2026, and the decision took effect on its issue date.
In practice, under FTA Decision No. 6 of 2026, the audited financial statements you already file are no longer enough on their own for this activity. You must also file a separate AUP report on the distribution conditions.
Who Must Comply with FTA Decision No. 6 of 2026?
The decision applies to a QFZP that carries out the qualifying activity of distribution of goods or materials in or from a Designated Zone. Under the decision, that means you buy, import, store and distribute goods to customers who resell them or process them for sale.
Trading companies, distributors, wholesalers and re-exporters in UAE Designated Zones should check their position now. If part of your income comes from other qualifying activities, review each stream separately. Our guide to free zone audit requirements in the UAE is a good starting point, and our team can confirm your scope through corporate tax services in the UAE.
The Mandatory Agreed-Upon Procedures (AUP) Report
The QFZP must obtain the AUP report from either of two auditors:
- the independent external auditor who also audits your annual financial statements; or
- any other independent auditor licensed in the UAE.
The auditor must follow International Standard on Related Services (ISRS) 4400, issued by the IAASB, together with UAE audit legislation. An AUP engagement differs from an audit. However, the auditor does not give an opinion. Instead, the report lists each procedure performed and the factual findings, so the FTA can draw its own conclusions.
Procedure 1: Verifying Customer Reseller Status
You must show that customers buy your goods to resell them, or to process or alter them for sale or resale. The auditor tests this with three procedures:
- Customer trade licences. The auditor inspects a sample of licences to see whether the listed activities point to trading, wholesaling, retailing, distribution or manufacturing.
- Customer declarations. The auditor obtains signed written confirmations from sampled customers. Each must be signed, dated and linked to the relevant tax period. A declaration can also confirm that goods are bought for donation to a public benefit entity.
- Sales agreements and transaction records. The auditor reviews executed agreements, invoices and purchase orders for signs of onward supply, such as bulk quantities, resale conditions or reseller pricing.
Procedure 2: Verifying Imports Through a Designated Zone
If you import goods into the UAE yourself, you must prove they entered through a Designated Zone. The auditor performs three checks:
- Import documentation: customs declarations, import permits, sales contracts and bills of lading or airway bills.
- Designated Zone status: confirmation that the free zone, port or area is formally a Designated Zone, supported by confirmation from the relevant Free Zone Authority to you.
- Internal records: inventory logs, warehouse reports and goods movement records showing the goods were received, handled or stored in the Designated Zone before distribution.
In addition, missing shipping or customs paperwork is the most likely cause of a weak finding, so organise it early.
FTA Sampling Methodology: The 10% Margin of Error Formula
The decision fixes how the auditor chooses samples:
Sample Size = Sample Population ÷ [1 + (Sample Population × Margin of Error²)], with a margin of error of 10%.
The population is the total number of customers, sales agreements or imports in the tax period, depending on the procedure. Two points matter in practice:
- The sample must include the highest-value customers, agreements and imports. The auditor cannot simply pick convenient items.
- The report must describe the evidence obtained, the timing and extent of work, and the findings. It must list the selected samples in an appendix.
For example, 200 customers give 200 ÷ (1 + 200 × 0.01) ≈ 67 samples. The decision does not state a rounding rule, so agree the approach with your auditor.
FTA Decision No. 6 of 2026 Deadline and Consequences of Non-Submission
File the report with the FTA no later than 30 days after the Corporate Tax return deadline for the tax period, unless the FTA sets another date. For a calendar-year company, that is 30 days after the 30 September filing deadline.
The penalty is severe. If you do not submit the report, the relevant conditions under Ministerial Decisions No. 84 and No. 229 of 2025 are treated as not met. That can put your QFZP status and the 0% rate on qualifying income at risk. For return-related deadlines, see our corporate tax filing services.
How to Prepare for FTA Decision No. 6 of 2026: A 7-Step Checklist
- Confirm whether your activity falls within the distribution scope.
- Collect valid trade licences for every customer.
- Start a process to collect signed, dated reseller declarations each tax period.
- Keep sales agreements, invoices and purchase orders in one organised file.
- Collect customs declarations, bills of lading, airway bills and import permits.
- Request Designated Zone confirmation from your Free Zone Authority.
- Appoint a licensed auditor early to plan the engagement, and keep inventory and goods movement records current.
Your auditor needs a solid trail, so strong books help. Our external audit service and our guide to IFRS accounting for Corporate Tax compliance explain what clean records look like. Free zone entities can also read about JAFZA approved auditors and DMCC audit requirements.
Frequently Asked Questions
Does every QFZP need an AUP report?
No. The decision targets QFZPs doing the qualifying activity of distribution of goods or materials in or from a Designated Zone.
Can our statutory auditor prepare the AUP report?
Yes. It can be the external auditor who audits your annual accounts or another independent auditor licensed in the UAE.
Is the AUP report the same as an audit?
No. It follows ISRS 4400, so it reports procedures and factual findings rather than an audit opinion.
When must the report reach the FTA?
Within 30 days after the Corporate Tax return deadline, unless the FTA sets a different date.
What happens if we miss the deadline?
The related QFZP conditions are treated as unmet, which can affect your 0% rate on qualifying income.
How Parker Russell UAE Can Help
For FTA Decision No. 6 of 2026, Parker Russell UAE supports free zone businesses with QFZP assessments, corporate tax advisory and independent audit. For this decision we can:
- assess whether your activity is in scope;
- review your customer, sales, import and logistics documents;
- identify documentation gaps and compliance risks;
- plan and coordinate the AUP engagement through appropriately licensed audit professionals; and
- support ongoing Corporate Tax and QFZP compliance.
Read the official rules on the Federal Tax Authority Corporate Tax page and the Ministry of Finance Corporate Tax page. Then contact Parker Russell UAE (Dubai +971 4 295 9958, infodubai@pr-uae.com) to check whether your business is affected.
This article is general guidance based on an unofficial translation of FTA Decision No. 6 of 2026. It is not tax advice. Check the official text for your situation.
