Choosing between QFZP, standard rate and SBR
Which is better for my small free zone company: the 0% regime, the 9% regime, or Small Business Relief?
The situation
The 0 percent regime saves tax on qualifying income but needs an audit, substance and strict tests. SBR gives no taxable income for revenue up to AED 3 million. The standard regime is simplest when neither fits.
The law
- Arts 18, 19 and 21, Federal Decree-Law 47 of 2022: QFZP, election out, and Small Business Relief
- Ministerial Decision 73 of 2023 as amended by Ministerial Decision 131 of 2026: Small Business Relief for revenue up to AED 3 million, tax periods ending on or before 31 December 2029
What it means for you
Example: revenue AED 2 million and profit AED 700,000, mostly qualifying. QFZP gives 0 percent but costs an audit of about AED 8,000 and carries failure risk. SBR gives nil tax with no audit under Corporate Tax law. For this profile, SBR is usually safer until revenue nears AED 3 million.
What to do
- Estimate revenue, profit and qualifying share.
- Price the audit and substance.
- Compare tax under each route.
- Choose and document the route.
We can do this for youQualifying Free Zone Person review and return: substance, qualifying income, de minimis test and audited accounts: AED 6,000