Why free zone clients need books from the start
Many owners of a free zone company assume they have no tax paperwork. In practice they may need to register for VAT once taxable supplies pass AED 375,000, and every company falls within the corporate tax regime. Whether a company can be treated as a qualifying free zone person depends on its income and activities, and that question cannot be answered without clean, categorised records.
Small business relief, which resident businesses with revenue up to AED 3 million can elect, is not available to qualifying free zone persons. Ministerial Decision 131 of 2026 extended the relief to tax periods ending on or before 31 December 2029. The trade-off between the two positions is a judgement for a registered tax agent, and it is much easier with a year of accurate books.