Small Business Relief now runs to 2029. Most free zone companies should take it, not QFZP.

What changed

Ministerial Decision 131, announced on 7 August 2026, extends Small Business Relief to tax periods ending on or before 31 December 2029. The revenue threshold stays at AED 3 million. Many advisory sites still show the old 2026 end date.

Under Small Business Relief a business with revenue up to AED 3 million is treated as having no taxable income for the period. You still register, you still file, and you make the election inside each return. There is no substance test.

Why QFZP is the election people regret

Qualifying Free Zone Person status is the one many free zone owners pick by reflex. Three things to know before you do:

• Accounting, bookkeeping, tax advisory and management consultancy are not Qualifying Activities under Ministerial Decision 229 of 2025. Invoice mainland or foreign clients for that kind of work and most of the revenue is non-qualifying.
• The de minimis is the lower of 5% of total revenue or AED 5 million. Breach it and the entity is taxed at 9% for five consecutive tax periods, with no way back in that window.
• A Qualifying Free Zone Person must have audited financial statements regardless of revenue, under Ministerial Decision 84 of 2025. Electing QFZP buys a mandatory audit at any size.

Small Business Relief and QFZP are mutually exclusive. A Qualifying Free Zone Person cannot claim the relief.

What it costs to get this wrong

Cabinet Decision 75 of 2023 sets the corporate tax penalties. Late filing is AED 500 a month for the first twelve months, then AED 1,000 a month. Late payment carries 14% per annum on the unpaid tax. Failing to keep records is AED 10,000, rising to AED 20,000 on a repeat within 24 months. The 14% is the number that hurts, not the AED 10,000 most people quote.

What to do before 30 September

Confirm the entity's revenue for the period, confirm it is not already registered as a Qualifying Free Zone Person, and make the Small Business Relief election in the return. If you are not sure which side of the line the entity sits on, the Free Zone Tax Check is a 20 minute conversation and there is no charge.

This note is general information, not advice on your specific facts. Sources: Ministerial Decisions 131 of 2026, 229 of 2025 and 84 of 2025, and Cabinet Decision 75 of 2023, all published by the UAE Ministry of Finance.