RAKEZ companies are not exempt from UAE Corporate Tax: every one must register and file a return each year, and a 31 December 2025 year end is due by 30 September 2026. A RAKEZ manufacturer may earn some Qualifying Income at 0% as a Qualifying Free Zone Person, but service or mainland income above the de minimis limit means 9% above AED 375,000 for five periods.
- Your company holds a RAKEZ licence for industrial, trading, service or e-commerce activity
- You manufacture or store goods in a RAKEZ industrial park and sell abroad or to mainland buyers
- Your RAKEZ company is small or nearly dormant but still licensed
- You are closing a RAKEZ company or have let the licence lapse
Not sure where you stand? Get a free 15-minute review or ask us on WhatsApp.
Are RAKEZ companies liable for Corporate Tax and VAT?
Yes. Every RAKEZ company is a taxable person that must register for Corporate Tax and file annually, whether it runs a factory or a single content website, and must register for VAT once taxable supplies and imports pass AED 375,000 in 12 months.
| RAKEZ profile | Corporate Tax | VAT |
|---|---|---|
| Manufacturer in a RAKEZ industrial park | Register and file; QFZP possible if every condition is met | Register; check designated area treatment for goods |
| Trading company importing and reselling goods | Register and file | Imports count toward AED 375,000 |
| Small service or content company, AED 200,000 to AED 300,000 turnover | Register and file; income up to AED 375,000 taxed at 0% | Voluntary if taxable supplies or expenses pass AED 187,500 |
| Near dormant company, bank fees only | Register and file a return | Not required |
| Revenue up to AED 3,000,000, not a QFZP | Small Business Relief may be elected for periods ending by 31 December 2029 | Normal thresholds |
Traders importing through RAKEZ should also read our free zone trading VAT guide and Corporate Tax for general trading companies.
Can a RAKEZ manufacturer or trader keep the 0% Qualifying Free Zone rate?
A RAKEZ manufacturer has a better chance than most free zone companies, because manufacturing and processing goods are on the Ministry of Finance Qualifying Activities list. It still has to meet every condition: adequate substance, Qualifying Income, the de minimis test, transfer pricing compliance and audited financial statements. Our QFZP guide covers each one.
Test each RAKEZ revenue line separately
Do not assume mainland sales fail or export sales pass. Some Qualifying Activities, such as manufacturing, can produce Qualifying Income from customers outside the free zones, while services and sales to individuals are generally non-qualifying. Review revenue line by line.
| RAKEZ revenue line | Usual starting point | What to check |
|---|---|---|
| Goods manufactured in RAKEZ and exported | Linked to a Qualifying Activity | Substance and where the manufacturing happens |
| Manufactured goods sold to mainland businesses | Can be qualifying for a Qualifying Activity | The activity and the transaction terms |
| Installation, repair or maintenance services for mainland clients | Generally non-qualifying | Counts toward the de minimis limit |
| Retail or online sales to individuals | Generally non-qualifying | Counts toward the de minimis limit |
| General trading of bought in goods | Often non-qualifying | Whether any distribution or commodity rules apply |
| Warehouse rental of a RAKEZ unit to others | Check immovable property rules | Who the tenant is |
The de minimis trap for mixed RAKEZ businesses
Non-qualifying revenue must stay within the lower of AED 5,000,000 or 5% of total revenue. A RAKEZ factory with AED 4,200,000 of revenue can earn only AED 210,000 from services or retail before failing, and failure means standard rates for that period and the next 4. Our Corporate Tax guide for small factories covers costing and capital spend.
Are RAKEZ industrial areas designated zones for VAT?
Some are: the FTA’s designated zone list includes designated areas of the RAKEZ Industrial Zone, but a RAKEZ licence alone does not put your premises inside one. Confirm your exact location against the FTA’s current published list before treating any goods movement as outside the scope of VAT.
What designated area status changes, and what it does not
Our designated zones VAT guide explains the conditions, and when free zone companies register for VAT covers the thresholds.
| Transaction | Designated area effect |
|---|---|
| Certain movements of goods within the designated area | Can be outside the scope of VAT, subject to FTA conditions |
| Goods leaving for the mainland UAE | Normally subject to VAT |
| Services, including installation and maintenance | Always 5% when taxable |
| A RAKEZ business centre or desk licence outside the designated area | No designated zone treatment |
RAKEZ renewal and audit versus FTA duties
Renewing with RAKEZ files nothing with the FTA. For Corporate Tax, Ministerial Decision No. 84 of 2025 requires audited statements from every Qualifying Free Zone Person and from companies with revenue above AED 50,000,000. Whether RAKEZ asks for audited accounts at renewal, including for companies with negligible turnover, must be confirmed with RAKEZ. See free zone audit requirements by zone and the UAE free zone audit guide.
Preparing and filing a RAKEZ company's Corporate Tax return
For an industrial RAKEZ company the heavy lifting is stock, costing and the revenue split; for a small service company it is mainly bank reconciliation.
Split revenue by activity and customer
Separate manufactured goods, traded goods, services and retail, and tag exports, mainland businesses, individuals and free zone buyers.
Count and value closing stock
Value raw materials, work in progress and finished goods so cost of sales is right.
Check substance
Confirm that people, plant and operating spend for the qualifying activity are in the UAE.
Run the de minimis test
Compare non-qualifying revenue with the lower of AED 5,000,000 or 5% of total revenue before choosing a route.
Arrange the audit if claiming QFZP
Book the auditor early; year end stock counts need to be observed.
Adjust to taxable income and complete disclosures
Add back non-deductible items and disclose related party and connected person transactions on the form.
Submit and pay on EmaraTax
File and pay by 30 September 2026 for a December 2025 year end, and keep records for 7 years.
The document pack a RAKEZ company should build
Industrial RAKEZ companies need more than a bank statement; build this pack as the year goes.
- RAKEZ licence, lease and any industrial unit plans showing the location
- Corporate Tax and VAT registration certificates
- Sales invoices tagged by activity and customer type
- Export documents and customs declarations
- Purchase invoices, import records and landed cost workings
- Year end stock count sheets and valuation
- Fixed asset register for plant and machinery
- Payroll records and evidence of UAE substance
- Audited financial statements if claiming QFZP
RAKEZ Corporate Tax and VAT deadlines to plan around
The immediate deadline for December year end RAKEZ companies is 30 September 2026 for the Corporate Tax return and payment.
| Date | Requirement | RAKEZ note |
|---|---|---|
| 30 September 2026 | Corporate Tax return and payment | Applies to factories and dormant companies alike |
| 28th of the month after each VAT period | VAT 201 and payment | Include designated area goods correctly |
| 7 months after the first tax period ends | First return filed | Waives the AED 10,000 late registration penalty |
| After the final return | Corporate Tax and VAT deregistration | Before the RAKEZ licence is cancelled |
| 31 March 2027 and 1 July 2027 | Appoint an e-invoicing provider, then go live | Revenue under AED 50,000,000 |
| 31 December 2029 | Last period end for Small Business Relief | Revenue up to AED 3,000,000 |
FTA penalty schedule for RAKEZ companies in 2026
RAKEZ companies face the national FTA penalties: AED 10,000 for late registration, AED 500 a month for a late Corporate Tax return and 14% a year on late payments. The figures follow Cabinet Decision 75/2023 as amended for Corporate Tax and Cabinet Decision 129/2025 for VAT.
| Violation | Penalty | Decision |
|---|---|---|
| Late Corporate Tax registration | AED 10,000, waived if the first return is filed within 7 months of the first tax period end | CD 75/2023 as amended |
| Late Corporate Tax return | AED 500 a month for 12 months, then AED 1,000 a month | CD 75/2023 as amended |
| Late Corporate Tax payment | 14% a year, calculated monthly | CD 75/2023 as amended |
| Late Corporate Tax deregistration | AED 1,000 a month, capped at AED 10,000 | CD 75/2023 as amended |
| QFZP condition failed | Standard rates for that period and the next 4 | Corporate Tax law |
| Late VAT registration | AED 10,000 plus backdated output VAT | CD 129/2025 |
| Late VAT return | AED 1,000 first, AED 2,000 repeat within 24 months | CD 129/2025 |
| Late VAT payment | 14% a year, calculated monthly | CD 129/2025 |
| Incorrect VAT return | AED 500 first, AED 2,000 repeat | CD 129/2025 |
How it stacks for a RAKEZ manufacturer owing AED 65,250 that files and pays 3 months late: 3 x AED 500 = AED 1,500 for the return plus AED 65,250 x 14% x 3/12 = AED 2,283.75 for payment, AED 3,783.75 in total. Our Corporate Tax penalties guide lists the rest.
RAKEZ company already facing penalties?
We check your registration, missed returns and any deregistration penalty and tell you the fastest way to stop the monthly charges.
7 errors RAKEZ companies make with Corporate Tax and VAT
These show up in both RAKEZ factories and one-person RAKEZ service companies.
- Believing RAKEZ companies are exempt. No free zone company is exempt from registering and filing; late registration costs AED 10,000.
- Adding a service line to a factory without testing de minimis. Installation income above 5% of revenue sinks QFZP for 5 periods.
- Treating the whole of RAKEZ as a designated zone. Only designated areas qualify for goods, so wrong treatment understates VAT and leads to incorrect return penalties.
- Skipping the audit on a QFZP claim. Audited statements are a condition; without them the 0% claim fails.
- Claiming Small Business Relief as a QFZP. The relief is not available to a Qualifying Free Zone Person.
- Letting the licence lapse without deregistering. Late Corporate Tax deregistration adds AED 1,000 a month up to AED 10,000.
- Thinking VAT registration refunds a CT penalty. The waiver depends on filing the first Corporate Tax return in time, not on VAT.
A RAKEZ compliance calendar that prevents FTA penalties
Tie these checks to your RAKEZ month end and stock cycles.
- Monthly: tag sales by activity and customer type and reconcile bank accounts
- Monthly: track rolling 12 month taxable supplies and imports
- Monthly: record goods movements in and out of any designated area
- Quarterly: file VAT 201 by the 28th and review non-qualifying revenue
- Quarterly: reconcile stock and landed cost
- Annually: observed stock count, auditor booked if claiming QFZP
- Annually: decide QFZP, Small Business Relief or standard rates before year end
- On closure: final returns and deregistration before cancelling with RAKEZ
Our bookkeeping guide for small manufacturers shows how to keep audit ready costing records.
RAKEZ company late on filings or facing a deregistration penalty?
File whatever is outstanding first: overdue returns stop adding monthly penalties only once submitted, and a nearly dormant RAKEZ company can follow our nil Corporate Tax return guide. Correct past errors, such as a wrong designated area treatment, through voluntary disclosure.
For a penalty you think is unfair, including late deregistration after a licence you could not afford to renew, request reconsideration within 40 business days of the decision; our reconsideration guide sets out the evidence. If the FTA refuses, the Tax Disputes Resolution Committee is the next step. Then finish closure with our Corporate Tax deregistration guide.
FTA notice for your RAKEZ company?
Send it to us and we will tell you whether to file, disclose or request reconsideration first.
Worked example: a RAKEZ packaging manufacturer with a mainland service line
Take an illustrative RAKEZ packaging manufacturer with AED 4,200,000 of revenue in 2025: AED 3,300,000 from manufactured goods exported to Gulf and African buyers, and AED 900,000 from installing and maintaining packing lines for mainland clients.
| Step | AED | Working |
|---|---|---|
| Total revenue | 4,200,000 | 3,300,000 + 900,000 |
| Service revenue from mainland clients | 900,000 | Generally non-qualifying |
| De minimis limit | 210,000 | Lower of AED 5,000,000 or 5% x 4,200,000 |
| QFZP | Fails | 900,000 exceeds 210,000, before even testing the exports |
| Total expenses | 3,100,000 | Materials, staff, depreciation, unit lease |
| Taxable income | 1,100,000 | 4,200,000 minus 3,100,000 |
| Taxed at 9% | 725,000 | 1,100,000 minus 375,000 |
| Corporate Tax | 65,250 | 9% x 725,000 |
| Small Business Relief | Not available | Revenue above AED 3,000,000 |
The service line alone removes the 0% rate for this period and the next 4, and revenue is too high for Small Business Relief. Had non-qualifying revenue stayed within AED 210,000, the de minimis test would have been met and the export income could have been assessed for Qualifying Income. That is a structuring question to settle before signing service contracts, not at filing.
RAKEZ tax filing: in house, freelancer or an accounting firm?
A small RAKEZ service company under AED 375,000 of taxable income can file itself; a RAKEZ manufacturer testing QFZP, stock and designated areas needs an accountant who knows those rules.
| Option | Cost | Risk | Right for |
|---|---|---|---|
| Owner or in house staff | Staff time only | Revenue split, stock and designated area errors | Small or near dormant RAKEZ companies |
| Freelance accountant | Typical market range: lower than a firm, varies by volume | Limited cover for audits and QFZP | Simple traders under the VAT threshold |
| Accounting firm such as Paci | Fixed quote within 24 hours, no hourly billing | Reviewed QFZP position and audit ready books | Manufacturers, importers and QFZP claimants |
For a reviewed return see our Corporate Tax filing service, and for QFZP claims our external audit preparation gets the books ready for the auditor.
What RAKEZ business owners ask us
I set up a RAKEZ company in 2023 for content websites, could not afford to renew the licence or visa, and now have a late Corporate Tax deregistration penalty. Can it be waived?
Late deregistration costs AED 1,000 a month, capped at AED 10,000. Deregister now so it stops growing, then request reconsideration within 40 business days of the penalty decision, explaining the circumstances with evidence. If the FTA refuses, the case can go to the Tax Disputes Resolution Committee.
A friend's RAKEZ company turns over AED 200,000 to AED 300,000 and he was quoted for the Corporate Tax return. Can he file it himself?
Yes, if the figures are backed by proper records kept for 7 years. Taxable income up to AED 375,000 is taxed at 0%, but the return is still compulsory and a late one costs AED 500 a month. Whether to pay for help is his commercial choice.
My RAKEZ company has almost no activity, one transaction and monthly bank fees. Can I just tick Small Business Relief and submit the return myself?
Usually yes, if revenue is within AED 3,000,000 and the company is not a Qualifying Free Zone Person. The relief is elective and covers tax periods ending on or before 31 December 2029. Keep the bank statements and the transaction record supporting the return for 7 years.
Are RAKEZ free zone companies exempt from Corporate Tax? I have seen claims they are not liable.
No. Every RAKEZ company must register and file. 0% applies only to a Qualifying Free Zone Person with adequate substance, audited statements, non-qualifying revenue within the lower of AED 5,000,000 or 5% of revenue, and transfer pricing compliance.
My RAKEZ company receives about AED 15,000 a month and I paid the AED 10,000 late registration fine. I read I can get it back by registering for VAT. Is that true?
No. The waiver depends on filing your first Corporate Tax return within 7 months of the end of your first tax period, not on VAT. At about AED 180,000 a year of revenue you are also below the AED 187,500 voluntary VAT threshold, though expenses also count toward voluntary registration.
Does my RAKEZ FZ-LLC need audited financial statements for Corporate Tax even with negligible turnover?
For Corporate Tax, only if you claim Qualifying Free Zone Person status, or revenue is above AED 50,000,000. A near dormant company on Small Business Relief does not need one for tax. RAKEZ’s own renewal requirement is separate and must be confirmed with RAKEZ.
Frequently asked questions
What is the corporate tax rate for a RAKEZ company?+
0% on Qualifying Income for a Qualifying Free Zone Person. Otherwise 0% on taxable income up to AED 375,000 and 9% above, or no tax if Small Business Relief is elected with revenue up to AED 3,000,000.
When is the RAKEZ corporate tax return due?+
Nine months after the financial year end. RAKEZ companies with a 31 December 2025 year end must file and pay by 30 September 2026; see our missed deadline guide if that date has passed.
When does a RAKEZ company need VAT registration?+
When taxable supplies plus imports exceed AED 375,000 in the previous 12 months or are expected to within 30 days. Voluntary registration is possible from AED 187,500. Late registration costs AED 10,000; see late VAT registration penalties.
Is a RAKEZ audit required every year?+
For Corporate Tax, audited statements are required every period for a Qualifying Free Zone Person and for revenue above AED 50,000,000, under Ministerial Decision No. 84 of 2025. RAKEZ’s licence renewal rule must be confirmed with RAKEZ directly.
Does manufacturing in RAKEZ qualify for 0% corporate tax?+
Manufacturing is a Qualifying Activity, so it can generate Qualifying Income, but only if the company meets every QFZP condition, including substance, audited statements and the de minimis test. Our Small Business Relief guide covers the alternative for smaller companies.
Can a RAKEZ company sell goods to the mainland?+
Commercially, subject to RAKEZ and customs rules. For VAT, goods leaving a designated area for the mainland are normally subject to VAT. For Corporate Tax, whether the income qualifies depends on the activity, so test it before claiming 0%.
Get your RAKEZ company's QFZP and VAT position reviewed for free
In a free 15-minute review a qualified accountant checks your revenue split, de minimis test, designated area treatment and Small Business Relief option. You get a fixed quote within 24 hours.
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- FTA: Registration for VAT
- FTA: Waiver of penalties
- Ministry of Finance: Decision on Small Business Relief for Corporate Tax
- RAKEZ: Ras Al Khaimah Economic Zone
Checked against these sources on 15 September 2026. This guide is general information for UAE businesses, not advice on your specific facts.