Dubai – Businesses operating in the distribution sector within UAE-designated free zones will soon receive detailed guidance on how the corporate tax framework applies to their operations, the Ministry of Finance confirmed on Monday.
The upcoming directives aim to provide certainty for distribution-focused companies looking to benefit from the UAE’s 0% corporate tax regime available to qualifying free zone entities.
The Federal Tax Authority (FTA) is expected to issue further guidance shortly, with a focus on ensuring eligible businesses in distribution can confidently align with the rules governing the tax-free benefits offered under the free zone corporate tax model.
Updated Financial Statement Requirements for Tax Groups
In addition to the distribution-specific update, the Ministry of Finance has also announced a new Ministerial Decision that outlines procedures for qualifying free zone entities and tax groups. One of the core updates involves clear requirements around financial reporting.
“All tax groups will be required to prepare audited special-purpose aggregated financial statements,” the Ministry said in a statement.
To ease compliance, however, the Ministry emphasized that individual members within a tax group will not be required to submit standalone audited accounts, thereby reducing the regulatory burden while maintaining transparency at the group level.
Further technical instructions will be released by the FTA on how tax groups should compile these aggregated statements in accordance with UAE corporate tax legislation.
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