Why 0% slips unnoticed
Qualifying status is retested every tax period, not awarded once at incorporation. A company that qualified in year one can drift out by year three and only find out at assessment.
The de minimis rule and other triggers
Clear four, and the fifth can still take the whole rate.
Substance falls short
The real activity in the free zone stops matching the income claimed.
Income stops qualifying
A new customer type or activity moves earnings outside the qualifying category, usually through growth.
The de minimis limit is exceeded Most often crossed
Non-qualifying income runs past the small permitted margin, often through a quietly shifting customer mix.
Accounts are not audited
The position can be right and still fail for want of audited proof.
Related-party pricing is off arm's length
Group billing is where this one hides.
How long a breach lasts
The consequences of a QFZP breach last longer than founders expect. A breach removes Qualifying Free Zone Person status for that tax period and the four that follow, with all income under the standard regime throughout.
Where your company falls against these lines is the judgement, and we work that out with you before a line is crossed.
Companies rarely decide to lose the 0%, because it drifts away as the business changes and so it needs watching.
We check your activity, customers, income split and records against the conditions and flag a line early. If restructuring or a 9% position is safer, we say so.
