Small Business Relief for UAE Corporate Tax

This guide summarises the published rules on Small Business Relief (SBR). It is not tax advice. Whether electing SBR is right for you depends on your figures, so confirm with the Federal Tax Authority (FTA) or a registered tax agent.

If you elect SBR for a tax period, you are treated as having no taxable income for that period, so no Corporate Tax is due. It is designed to cut the cost of compliance for small businesses and start-ups. You still have to register for Corporate Tax and file a return; you claim the relief in that return.

SBR was due to end with tax periods ending on 31 December 2026. In August 2026 the Ministry of Finance issued Ministerial Decision No. 131 of 2026, which extends it to tax periods ending on or before 31 December 2029. The AED 3 million threshold and the other conditions stay the same.

• You are a UAE resident person (a company, or an individual doing business).
• Your revenue is AED 3,000,000 or less in the tax period you are claiming for.
• Your revenue was also AED 3,000,000 or less in every previous tax period.

The second test catches people out. The FTA's own example: a business with AED 4.3 million revenue in 2025 can't claim SBR for 2026, even if its 2026 revenue drops to AED 1.9 million. Once you go over the threshold, you lose access to SBR for later periods.

• Qualifying Free Zone Persons, who have their own 0% regime instead.
• Members of a multinational group with consolidated group revenue above AED 3.15 billion.
• Businesses that split themselves artificially to stay under the threshold. The FTA can deny the relief and impose penalties.

When you elect SBR, other Corporate Tax exemptions, reliefs and deductions don't apply for that period. In practice:

• A tax loss made in an SBR period can't be carried forward. If you expect a loss this year, not electing may be worth more later.
• Losses from earlier periods can't be used in an SBR period.
• You don't need transfer pricing documentation, but dealings with related parties must still be at arm's length.

For a profitable business under AED 375,000 of taxable income, Corporate Tax is already 0%, so SBR mainly saves paperwork. Above that, it can save 9% on the excess.

1. Register for Corporate Tax on EmaraTax if you haven't already.
2. Keep accounting records that show your revenue for each tax period.
3. When you file your Corporate Tax return (within 9 months of the end of the tax period), choose to elect Small Business Relief.
4. Make the choice again for each tax period. It doesn't carry over automatically.

Last reviewed: 19 October 2026.

• FTA: Small Business Relief
• FTA: Small Business Relief Corporate Tax Guide
• Ministry of Finance: SBR extended to 31 December 2029
• Ministerial Decision No. 131 of 2026