SBR / QFZP
UAE Tax Fundamentals
Why It Is Important Not to Delay
Penalty for late registration after exceeding the mandatory VAT registration threshold.
Late VAT Return Filing
For each VAT return
filed late.
Penalty for late registration after exceeding the mandatory VAT registration threshold.
Late Tax Payment
Charged on the outstanding tax amount.
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03
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F A Q
What Is Small Business Relief?
Small Business Relief allows an eligible taxpayer to elect for a special regime under which it is treated as having no taxable income for the relevant tax period. The applicable conditions must be met and the election must be made in order to use the relief.
Which Companies Can Apply SBR?
The FTA currently states a revenue threshold of no more than AED 3 million for the relevant and previous tax periods. The relief applies to eligible tax periods ending no later than 31 December 2026. Before applying it, the company’s status and revenue history should be reviewed separately.
What Is a Qualifying Free Zone Person?
It is a Free Zone company that meets the conditions prescribed by law, including requirements relating to adequate substance, Qualifying Income, and transfer pricing. Compliance with these conditions must be maintained throughout the tax period.
Can SBR and QFZP Status Be Applied at the Same Time?
No. A Qualifying Free Zone Person is not eligible to elect for Small Business Relief. It is therefore necessary to determine which regime applies to the company first.
What Happens If a Company Stops Meeting the QFZP Requirements?
Failure to meet one of the mandatory conditions may result in the loss of Qualifying Free Zone Person status and a change in the applicable tax treatment. The consequences depend on the specific circumstances and the rules in force.
