FTA Decision No. 6 of 2026: The AUP Report for Free Zone Distributors

Distribution of goods or materials in or from a Designated Zone is one of the qualifying activities that can earn 0% for a qualifying free zone person. Ministerial Decision No. 229 of 2025 sets its conditions: the activity is carried on in or from a Designated Zone, goods entering the UAE are imported through a Designated Zone, and goods are supplied to customers who resell them or process them for sale, or to a public benefit entity.

Ministerial Decision No. 84 of 2025 already requires every qualifying free zone person to keep audited financial statements, and Article 2(3) lets the Authority prescribe further procedures. FTA Decision No. 6 of 2026 uses that power. Advisers report it was issued on 2 June 2026; Deloitte's summary is dated 20 July 2026.

The decision does not change the distribution conditions. It changes how you prove them: by an independent auditor's report of factual findings on the customer and import evidence. That report is in addition to the audited financial statements, not a replacement for them. Check the FTA's published text before relying on any summary, including this one.

You need the report if all three are true:

1. you are a qualifying free zone person, or intend to be treated as one, for a tax period starting on or after 1 January 2026;
2. you carry on distribution of goods or materials in or from a Designated Zone; and
3. you treat income from that distribution as qualifying income.

You do not need it if your qualifying activities are services only, if you have elected to be taxed at the standard rate, or if you are a mainland company. A free zone licence on its own does not make a business a Designated Zone distributor: the zone must be a Designated Zone, and the goods and customers must meet the conditions.

Example: a JAFZA company importing consumer electronics through Jebel Ali and selling to UAE retailers who resell them is the typical case. A free zone software consultancy is not caught. If you are unsure whether you meet the wider qualifying tests, start with the qualifying free zone person test.

Summaries by Deloitte and SimplySolved describe six procedures: inspecting customers' trade licences, verifying signed customer declarations or confirmations, reviewing sales agreements, inspecting import documents, confirming Designated Zone status, and inspecting internal records such as inventory logs and goods movement reports. Keep the evidence ready: customer licences, signed declarations, agreements, invoices, purchase orders, import declarations, customs clearance documents and bills of lading or airway bills.

Sample size uses a 10% margin of error: sample = population / (1 + population x 0.10 squared), and each sample must include the highest-value items in the period.

• 400 customers: 400 / (1 + 400 x 0.01) = 400 / 5 = 80 customers.
• 1,000 import consignments: 1,000 / (1 + 1,000 x 0.01) = 1,000 / 11 = about 91 consignments; check the decision for its rounding rule.

Under ISRS 4400, the auditor reports what was found. It gives no opinion and does not confirm your qualifying status. The FTA, not the auditor, draws the conclusion from the findings, which is why complete evidence matters more than a favourable tone in the report.

The report must be submitted no later than 30 days after the deadline for filing the corporate tax return for the relevant tax period, unless the FTA sets another date. The return itself is due nine months after the end of the tax period.

• Calendar year 2026: return due 30 September 2027, report due 30 October 2027.
• Year ending 31 March 2027: return due 31 December 2027, report due 30 January 2028.

The engagement can be performed by your statutory auditor or by any other independent auditor licensed in the UAE. Using the statutory auditor usually means one evidence request and one visit; using another firm can make sense if your current auditor is stretched. Either way, appoint early. The procedures test records created during the year, and a missing customer declaration is far easier to obtain in month three than after year end. Build the declaration into customer onboarding and file customs documents by consignment from day one.

Remember that the corporate tax return deadline also drives your audited financial statements, which a qualifying free zone person needs at any revenue. Running the audit and the agreed-upon procedures in the same window, with one evidence request list, is usually the most efficient approach.

Under the decision, if the report is not submitted within the period, the related conditions are treated as not met. Galadari's summary says the person then ceases to be a qualifying free zone person for that tax period and the following four, the same consequence that applies to any failed condition. That makes this a five-year exposure, not a late-filing fine. See what losing qualifying status costs.

Practical steps for 2026 periods:

1. Map your customers and confirm which buy for resale or processing.
2. Collect valid trade licences and signed declarations now, not at year end.
3. Confirm the zone is a Designated Zone and that imports came through one.
4. Agree the AUP engagement, its procedures and its fee in a separate letter.
5. Diary the submission date alongside the return.

If you hold FTA correspondence or a published version of the decision that differs from these summaries, follow the official text. Expect the auditor to report every exception it finds, such as a customer without a valid licence or a consignment with no Designated Zone import record, so fix gaps in the records before the procedures start rather than after.