ISRS 4400 for a QFZP Distributor: How to Prepare Evidence Before the Deadline

Practical question
If a company operates under the QFZP regime and distributes goods in a Designated Zone or from it, what must be organised before the tax period ends to comply with FTA Decision № 6 of 2026?

Short answer
Such a company must obtain an ISRS 4400 agreed‑procedures report from an independent external auditor as required by the Decision and submit it to the FTA within the timetable set out in the Decision. Preparation should start earlier: evidence of buyers’ status and of goods imported via the Designated Zone must be collected as transactions occur, not reconstructed after year‑end.

What the Decision requires
The requirement is triggered by the actual performance of qualifying distribution activities of goods or materials in or from a Designated Zone, not by the licence name alone; confirm applicability against the Decision and related instruments.

The report must demonstrate the factual matters the Decision prescribes concerning purchasers and movement/importation of goods through the Designated Zone. The auditor documents the procedures performed and the factual findings; this is an agreed‑procedures (ISRS 4400) engagement, not an audit opinion on financial statements.

The Decision sets a defined list of procedures and a sample‑size approach, including treatment of higher‑value transactions; consult the Decision text to confirm the exact procedures, the sampling formula and the submission timing relative to the corporate tax return.

Practical view
ISRS 4400 should be treated as a test of the evidence architecture. If buyer licences, resale declarations, contracts, customs documents and warehouse records reside in different systems and are not reconciled to the accounting records, mere existence of documents does not ensure a successful review. The working model links each sale, buyer and import lot to a single verifiable data package.

Steps to take
1. Confirm the company actually performs distribution activity that falls within the Decision’s scope (for example, compare functions, contracts and transfer of title with the criteria in Ministerial Decision № 229 of 2025 and the FTA Decision).
2. Create a buyer register: licence, business activity, signed declaration or confirmation of purchase purpose, contract, purchase order and invoice.
3. Create an import‑lot register: customs declaration, permit, contract, bill of lading or airway bill, confirmation of the zone, warehouse and logistics records.
4. Reconcile both registers with the accounting system, revenue records and the population from which the auditor will draw the sample.
5. Calculate the sample per the Decision’s formula and separately identify the highest‑value transactions as described in the Decision; if any sampling approach deviates from the Decision, document the rationale and agreement with the auditor.
6. Appoint an auditor and agree the evidence format before period‑end so missing documents are identified during preparation, not after the filing deadline.
7. Put the report into the corporate tax calendar: the return and the subsequent ISRS 4400 submission must have an owner, readiness controls and confirmation of filing.
8. Set a retention period not less than the general corporate tax record retention period specified in UAE legislation and check whether any specific documents require longer retention.

Useful materials
Check the current text of the Decision and related instruments in the FTA corporate tax legislation register: https://tax.gov.ae/en/legislation/corporate.tax.aspx

Next practical step
If the structure is still being designed, first map the goods route, clients and licence to the appropriate UAE registration option: https://uppersetup.com/ru/countries/uae

If the company already operates, set up the registers, reconcile transactions and prepare the data pack for the auditor within the accounting system: https://uppersetup.com/ru/accounting-services

What to confirm before launch
Obtain confirmation of Designated Zone status and verify classification of actual activity. Logistic services and distribution are distinct qualifying activities; the conclusion depends on company functions, contracts and transfer of title.

Consequences of non‑submission
Failure to submit the report means the conditions set out in FTA Decision № 6 of 2026 are not treated as satisfied. Thereafter the qualification of the relevant income, the amount of non‑qualifying revenue, any de minimis test and the impact on QFZP status are assessed under the applicable rules; outcomes depend on the entity‑specific facts and applicable instruments.

Conclusion
Make the ISRS 4400 requirement a routine process: determine applicability, collect evidence with each transaction, pre‑agree the format with the auditor and control submission in the timetable set by the Decision so the report is the output of a working control system rather than a rushed reconstruction after year‑end.