Yes, where the relevant rules apply. A Qualifying Free Zone Person must prepare and maintain audited financial statements under Ministerial Decision No. 84 of 2025. If it carries on the qualifying activity of distributing goods or materials in or from a Designated Zone, FTA Decision No. 6 of 2026 additionally requires an agreed-upon procedures report.
An annual audit does not automatically deliver that additional report. Finance teams should confirm both the audit scope and the AUP deliverable before assuming their engagement covers the requirement.
For businesses preparing their 2026 accounts, that distinction affects the records they collect, the work they commission and their reporting timetable.
What is the difference between an audit and an AUP report?
A financial statement audit provides an auditor’s opinion on the financial statements. An agreed-upon procedures engagement reports the procedures performed and their factual findings, without an audit opinion or an assurance conclusion.
The distinction concerns the work and reporting objective, even when the same firm performs both engagements.
| Comparison | Financial statement audit | AUP report under FTA Decision No. 6 of 2026 |
| Main focus | Financial statements as a whole | The prescribed procedures concerning the qualifying distribution activity |
| Reporting outcome | Auditor’s opinion on the financial statements | Procedures performed and related factual findings |
| Assurance | Reasonable assurance, rather than absolute assurance | No assurance opinion or conclusion |
| Relevant framework | International Standards on Auditing for an ISA audit | ISRS 4400 and the requirements of FTA Decision No. 6 |
| Does one automatically replace the other? | No | No |
Which free-zone distributors need both reports?
The additional AUP requirement applies to QFZPs carrying on the qualifying activity of distribution of goods or materials in or from a Designated Zone. It is not a blanket AUP requirement for every free-zone company.
Begin by identifying the entity, its QFZP position and the actual activity involved. A trade licence description alone should not be used as the full assessment of the business’s Corporate Tax treatment.
The legal starting point for the audit obligation is Ministerial Decision No. 84 of 2025, Article 2. It identifies QFZPs as a category required to prepare and maintain audited financial statements and separately anticipates additional procedures for the relevant distribution activity. [1]
The FTA-published Decision No. 6 of 2026 sets out those procedures. It applies to Tax Periods commencing on or after 1 January 2026. [2]
For the wider audit categories, read KGRN’s guide to audited financial statements for UAE Corporate Tax.
Does the AED 50 million threshold remove the QFZP audit obligation?
No. MD 84 lists a QFZP separately from the revenue-based category. The requirement for a QFZP to prepare and maintain audited financial statements does not depend on exceeding AED 50 million.
The revenue category applies to a Taxable Person that is not a Tax Group and derives revenue exceeding AED 50 million during the relevant Tax Period. Tax Groups have their own special-purpose financial statement requirement.
Consequently, a smaller QFZP distributor should not assume that lower revenue removes its annual audit obligation or the additional AUP requirement where its activity falls within Decision No. 6.
Can the same auditor perform the audit and AUP engagement?
Yes. Decision No. 6 permits the AUP report to be obtained from the independent external auditor responsible for the annual financial statement audit, or another independent auditor licensed in the UAE.
Using the same eligible firm may help coordinate information requests and scheduling. That is a practical benefit, not a statement that an audit engagement automatically includes the AUP work.
Ask for the two deliverables to be identified clearly in the proposal. Confirm the relevant Tax Period, evidence requests, reporting responsibilities, timetable and fees.
Businesses reviewing external audit services in the UAE should discuss the additional scope at the start of the engagement rather than after the annual audit report has been completed.
What does the AUP report examine?
The decision focuses on evidence supporting two conditions: the relevant customers’ resale activity and, where the QFZP imports goods into the UAE, importation through a Designated Zone.
Customer status and onward sale
The prescribed work includes inspecting customer licences, checking signed written declarations or confirmations and reviewing agreements or other transaction records. The report records factual findings from those procedures.
A licence describing trading activity is one piece of evidence. Finance teams should prepare it alongside the relevant declarations and transaction records rather than assume it substitutes for the other procedures.
Importation through a Designated Zone
The procedures also address import documentation, confirmation of Designated Zone status and internal records evidencing the movement of goods. Relevant records include customs documents, transport documents, inventory logs and warehousing or logistics records.
Keep the evidence connected to the relevant entity and Tax Period. An organised file makes it easier to resolve differences between finance, sales and logistics records before reporting begins.
For more regulatory detail, see KGRN’s FTA Decision No. 6 of 2026 explainer.
What documents should finance teams prepare?
Build the evidence file around the decision’s procedures rather than sending an unstructured collection of invoices.
| Evidence area | Records to discuss with the auditor |
| Customer activity | Valid business, trade or commercial licences, or equivalent documents |
| Customer confirmations | Signed and dated declarations or confirmations relating to the relevant Tax Period |
| Sales activity | Executed agreements, invoices, purchase orders and other relevant transaction records |
| Imported goods | Customs declarations, import permits and transport documents |
| Goods movement | Inventory, warehouse and logistics records |
| Zone status | Confirmation from the relevant Free Zone Authority of Designated Zone status |
These categories reflect Decision No. 6; the final information request depends on the prescribed work and the business’s circumstances.
The decision also specifies sampling requirements. Ask the auditor what complete customer, sales agreement and import populations are needed. Providing only management-selected examples may not support the prescribed sample selection.
When must the AUP report be submitted?
The AUP report must be submitted to the FTA no later than 30 days following the deadline for filing the Corporate Tax return for the relevant Tax Period, or another date determined by the FTA. [2, Article 2(7)]
The reference point is the return filing deadline. It is not the date the annual audit finishes or the date the business chooses to submit its return early.
There is therefore no single October 2026 AUP deadline for every affected distributor. Confirm the relevant Tax Period and filing deadline, then include the additional reporting date in the compliance calendar.
As a practical step, agree the evidence timetable before year-end. Collecting customer confirmations and reconciling import records can require cooperation across several teams.
What happens if an affected QFZP does not submit the report?
Article 2(8) states that failure to submit the required AUP report means the specified additional-procedures condition under MD 84 and qualifying-distribution condition under MD 229 of 2025 are not considered met.
This is a substantive compliance issue, not simply an incomplete engagement file. Its wider Corporate Tax consequences require assessment against the entity’s facts and the applicable free-zone rules.
Avoid assuming either that the report is optional or that every missing document automatically produces the same tax outcome. The decision prescribes procedures and reporting obligations; the implications of individual findings need careful assessment.
KGRN’s Corporate Tax advisory team can help assess how the requirements relate to your business’s tax position.
What should your audit and AUP proposal include?
A clear proposal should identify the annual audit and the regulatory AUP report as distinct deliverables, even where they are coordinated within one overall timetable.
Recommended questions include:
- Does the AUP scope expressly address FTA Decision No. 6 of 2026?
- Which entity and Tax Period does each engagement cover?
- Who will supply customer confirmations and import records?
- What are the responsibilities for report completion and submission?
- How will missing evidence affect the work programme and timetable?
These are procurement recommendations, not additional statutory conditions. They help finance leaders compare proposals on scope instead of assuming that the lowest audit fee covers every required report.
Frequently asked questions
Does a clean annual audit report remove the need for an AUP report?
No. Where Decision No. 6 applies, the AUP report is an additional deliverable with prescribed procedures. An unmodified financial statement audit opinion does not substitute for it.
Does an AUP report provide an audit opinion?
No. An AUP report communicates procedures and factual findings. Users evaluate those findings; the engagement does not provide an audit opinion or assurance conclusion.
Does every UAE free-zone company need an AUP report?
No. This particular requirement concerns QFZPs undertaking the specified qualifying distribution activity in or from a Designated Zone. Other businesses must assess their own obligations.
Can a different independent auditor prepare the AUP report?
Yes. Decision No. 6 permits another independent auditor licensed in the UAE to perform the engagement instead of the annual financial statement auditor.
Should we wait until after filing the return to prepare?
Early preparation is advisable. The reporting deadline is linked to the return deadline, but the evidence and procedures should be planned in advance. That is practical guidance, not a separate statutory start date.
