Free zone company and Small Business Relief
My free zone company has small revenue. Can I claim Small Business Relief?
The situation
Qualifying Free Zone Persons cannot use Small Business Relief. A free zone company that does not claim that status, or has elected the standard rate, can use it if revenue is within AED 3 million.
The law
- 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
- Art 19, Federal Decree-Law 47 of 2022: Election out of the free zone regime
What it means for you
Small free zone companies often find SBR simpler, because it needs no audit or substance test under Corporate Tax. Example: a zone consultancy with AED 800,000 revenue mostly from mainland clients cannot get 0 percent on that income anyway, so SBR gives a better result. Check whether your zone still wants audited accounts for renewal.
What to do
- Decide whether you meet Qualifying Free Zone Person conditions.
- If not, or if SBR is better, do not claim that status.
- Elect SBR in the return.
- Keep revenue records for every period.
We can do this for youCorporate Tax return with Small Business Relief for SMEs and freelancers with revenue up to AED 3 million: AED 2,250