FTA Decision No. 6 of 2026 Explained: The New AUP Report Free Zone Distributors Must File

If you run a distribution business out of a UAE Free Zone and you have been claiming the 0% corporate tax rate on that income, the Federal Tax Authority now wants proof, not just a declaration. FTA Decision No. 6 of 2026 spells out what that proof has to be, who needs it, and what happens if you don’t provide it.

This decision was issued on 2 June 2026. It is narrow, technical, and easy to misread if you only skim the headline. Below is what it actually means for your business, including the parts most coverage of it will skip.

Jump to:

• What FTA Decision No. 6 of 2026 requires
• Which QFZPs need an AUP report
• Does this apply to your FY2025 return?
• What the AUP report must prove
• Documents required for the AUP report
• AUP sample size explained
• AUP report deadline
• What happens if you miss the AUP deadline
• Same auditor or a different one for the AUP report
• What the decision doesn’t answer yet

What FTA Decision No. 6 of 2026 Requires: The AUP Report Explained

If your Free Zone company claims the 0% rate on income from distribution of goods or materials in or from a Designated Zone, you now need an Agreed-Upon Procedures report from an independent auditor. This is not your annual financial audit. It is a separate, focused report where the auditor checks specific evidence and reports the factual results, without giving an opinion on whether your accounts are fairly presented overall.

This requirement builds on existing corporate tax rules rather than standing alone. Federal Decree-Law No. 47 of 2022 is the base law. Cabinet Decision No. 100 of 2023 and Ministerial Decision No. 229 of 2025 define distribution as a Qualifying Activity. Ministerial Decision No. 84 of 2025 covers audited financial statements. FTA Decision No. 6 of 2026 adds the specific proof you now have to submit to keep claiming the 0% rate on that activity.

The auditor has to follow International Standard on Related Services 4400, known as ISRS 4400. This is a recognised global audit standard used for exactly this kind of targeted, fact-finding engagement, so your auditor almost certainly already knows how to run one.

Which QFZPs Need an AUP Report (and Which Don’t)

This requirement only catches Qualifying Free Zone Persons claiming the specific distribution activity described in Ministerial Decision No. 229 of 2025, meaning you buy and sell goods in or from a Designated Zone and your customers resell them, or process and alter them for resale.

It does not automatically apply to every Free Zone company that happens to sell goods. A manufacturer that occasionally sells surplus stock is not caught by this. A logistics company that moves goods for other people without ever owning them is not caught either, since it is not claiming the distribution activity in the first place. Check your actual qualifying activity classification on our guide to qualifying and excluded activities if you are not sure which category your income falls into.

There is also a narrower point worth knowing. The decision sets two separate tests: one for proving your customers are resellers, and one for proving any goods you personally imported came through a Designated Zone. That second test only applies if you actually import goods yourself. If every product you distribute is sourced from suppliers already inside the UAE and you never import anything directly, you may only need to satisfy the reseller test, not the import test. This can meaningfully cut down what your auditor needs to check.

Does This Apply to Your FY2025 Corporate Tax Return?

No. The decision applies to Tax Periods starting on or after 1 January 2026. Any Tax Period covering FY2025 started before that cutoff, whatever your fiscal year dates are, so this AUP requirement does not apply to it. A calendar year FY2025 Tax Period, for example, runs from 1 January 2025 to 31 December 2025, with a filing deadline of 30 September 2026, and still falls outside this requirement.

For a calendar year business, the first Tax Period this actually applies to is 1 January 2026 to 31 December 2026, with a filing deadline of 30 September 2027 and an AUP report deadline of 30 October 2027, unless the FTA sets a different date.

If your financial year does not run on the calendar, the same principle applies. Look at when your current Tax Period started. If it started before 1 January 2026, this requirement does not apply to that period. If it started on or after 1 January 2026, it does.

That does not mean this is something to think about next year. If your Tax Period is the 2026 calendar year, you are already several months into the period this requirement covers. The report and filing deadlines fall in 2027, but the customer declarations, trade licences, sales agreements, and import records the auditor will need have to be collected as you go through 2026, not gathered after the fact once the year has closed. Waiting until the AUP engagement starts to look for this evidence is the most common way businesses end up short on documentation.

What the AUP Report Must Prove About Your Customers and Imports

The AUP report has to establish two separate things, and both need to be backed by tested evidence, not just management’s word.

First, that your customers genuinely resell the goods or materials you supply, or process and alter them before reselling. A customer who buys your product to use it themselves, rather than sell it on, does not count, and sales to that kind of customer put your qualifying status at risk.

Second, if you personally import goods into the UAE, that those goods entered through a Designated Zone and not through an ordinary port or airport outside one.

Documents Required for the AUP Report

The decision names specific evidence types the auditor will look for. Start pulling these together now rather than scrambling for them once the audit begins.

To prove your customers are resellers:

• Valid trade, business, or commercial licences held by your customers that show reselling, wholesaling, retailing, distributing, or manufacturing as part of their listed activities.
• Signed, dated declarations from customers confirming they are buying the goods for resale, or for donation to a public benefit entity.
• Sales agreements, invoices, and purchase orders that show a pattern of onward resale, such as bulk quantities or resale pricing terms.

To prove goods entered through a Designated Zone:

• Import declarations and customs clearance documents.
• Shipping documents such as a bill of lading or airway bill that clearly show entry through a Designated Zone.
• Internal records like inventory logs, warehousing reports, and goods movement records showing the goods were received and handled within the Designated Zone.

AUP Sample Size: How Many Customers Get Checked

Your auditor is not expected to check every single customer or shipment. The decision sets a formula for how many need to be sampled, based on your total customer or transaction count for the year, with a 10% margin of error built in. The auditor prioritises your highest value customers, sales agreements, or imports first.

Here is what that formula works out to in practice, rounded up to the nearest whole number:

The smaller your customer base, the closer to a full review this becomes. Once you are dealing with a few thousand customers or more, the required sample flattens out to roughly 100, no matter how much bigger the population gets.

AUP Report Deadline for Distribution QFZPs

The AUP report has to reach the FTA no later than 30 days after your corporate tax return filing deadline, unless the FTA specifies a different date. Since the filing deadline itself is 9 months after your Tax Period ends, the AUP deadline effectively lands about 10 months after your financial year closes. Here is how that plays out for common financial year ends, assuming your Tax Period started on or after 1 January 2026 and is therefore in scope:

What Happens If You Miss the AUP Deadline

Missing the AUP deadline does not end your business or trigger an automatic penalty notice on its own. What it does is remove your proof that the qualifying conditions were met. The FTA treats the distribution activity as failing to satisfy the conditions in Ministerial Decision No. 229 of 2025, which means the income from that activity is taxed at the standard 9% rate instead of 0% for that Tax Period.

The bigger risk is what that reclassification can trigger. If shifting your distribution income into the non-qualifying category pushes your total non-qualifying revenue past the de minimis limit, which is the lower of AED 5 million or 5% of total revenue, you can lose your full QFZP status, not just the distribution income treatment, for that Tax Period and the following four Tax Periods.

If you want a second set of eyes on where your business currently stands against these conditions, our Free Zone 0% Corporate Tax and QFZP compliance service covers exactly this kind of review, including preparing for the AUP process itself.

Can You Use the Same Auditor for the AUP Report?

Yes. You can use the same auditor who handles your annual financial statement audit, or bring in a different licensed auditor for the AUP engagement specifically. Neither option is required over the other.

Using your existing auditor is usually faster since they already know your business, your systems, and where your records live. Bringing in a separate auditor adds a layer of independence some businesses prefer, particularly if the same firm auditing your financials would otherwise be reporting on the reliability of processes it also signed off on elsewhere. Either choice satisfies the requirement. Which one makes sense depends on how your business weighs speed against a second, independent perspective.

What FTA Decision No. 6 of 2026 Doesn’t Answer Yet

A few practical points are not directly addressed in the decision text, and businesses should treat these as open until the FTA issues further guidance.

• The decision does not specify a required report format or template, only that it must follow ISRS 4400 and document the procedures, evidence, and findings.
• There is no stated grace period or short-extension mechanism if a business is close to ready but not quite finished by the deadline.
• The decision allows minor wording changes to the prescribed procedures, as long as the substance stays the same, with the changes noted in an appendix. How much flexibility auditors will actually take with this in practice is not yet clear.

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