Small Business Relief — UAE Corporate Tax for smaller businesses
Under Small Business Relief (SBR), resident businesses with revenue of AED 3 million or less can elect to be treated as having no taxable income. The relief has now been extended to tax periods ending on or before 31 December 2029. We check whether you qualify and what you give up, and prepare the return with the election.
The conditions
| Who | A Resident Person that elects for the relief — resident companies, and individuals whose business turnover exceeds AED 1 million in a calendar year (below that, an individual is not within Corporate Tax at all) |
| Revenue test | Revenue of AED 3,000,000 or less in the current tax period and in each previous tax period |
| Tax periods | Starting on or after 1 June 2023 and ending on or before 31 December 2029 (extended from 31 December 2026 by Ministerial Decision No. 131 of 2026) |
| Not available to | Qualifying Free Zone Persons and members of Multinational Enterprise Groups (consolidated group revenue above AED 3.15 billion) |
| Once over the limit | If revenue exceeds AED 3 million in any tax period, the relief can't be elected again |
What the election means
- You are treated as having no taxable income for that tax period, so no Corporate Tax is payable.
- You still register for Corporate Tax and file a return each year — the election is made in the return, submitted through EmaraTax, the Federal Tax Authority's (FTA's) online portal.
- Exempt income, reliefs, deductions and tax loss relief don't apply in an SBR year, and the transfer pricing documentation rules don't apply, although related-party transactions must still be at arm's length.
- Records must be kept for seven years after the end of the tax period.
What you give up
- Losses: a tax loss made in a year when the relief is elected can't be carried forward. Losses from earlier years are not used in SBR years, but stay available for later years when the relief isn't elected.
- Interest: the same applies to net interest expenditure that would otherwise be carried forward.
So for a business that is loss-making now but expects profits later, electing the relief is not always the better choice. We compare both positions before filing.
Records and financial statements
- A business with revenue of AED 3 million or less may prepare its financial statements on a cash basis (Ministerial Decision No. 114 of 2023).
- Audited financial statements are required for revenue above AED 50 million or for Qualifying Free Zone Persons (Ministerial Decision No. 84 of 2025), so businesses within the SBR limit are generally outside that requirement.
Splitting a business to stay under the limit
Artificially separating a business so that each part stays under AED 3 million may be treated as an arrangement to obtain a tax advantage. The FTA looks at whether there is a valid commercial reason and whether substantially the same business is being carried on. If it applies, the Corporate Tax that would have been due must be paid, and penalties may apply.
How we help
- We check the revenue test across all your tax periods and confirm you are not excluded.
- We compare electing the relief with not electing it, where losses or interest are involved.
- We prepare the Corporate Tax return with the election and submit it through your EmaraTax account; bookkeeping and financial statements can be added if you need them.
Sources: Federal Decree-Law No. 47 of 2022 on the Taxation of Corporations and Businesses, as amended (Articles 21, 50 and 56); Cabinet Decision No. 49 of 2023 (natural persons); Ministerial Decision No. 73 of 2023 on Small Business Relief (Articles 2 to 6), as amended by Ministerial Decision No. 131 of 2026 (issued 29 July 2026) and Ministry of Finance announcement of 7 August 2026; Ministerial Decision No. 114 of 2023; Ministerial Decision No. 84 of 2025; FTA Small Business Relief Corporate Tax Guide CTGSBR1 (August 2023, which predates Ministerial Decision No. 131 of 2026) and FTA Small Business Relief page.
Frequently asked questions
Do I still need to register for Corporate Tax if I use Small Business Relief?
Yes, if you are within Corporate Tax. The relief is elected in the Corporate Tax return, so a company must be registered and file a return for each tax period. An individual needs to register only once business turnover exceeds AED 1 million in a calendar year.
Until when is Small Business Relief available?
Ministerial Decision No. 131 of 2026 extended it to tax periods ending on or before 31 December 2029. The original end date was 31 December 2026.
Can a free zone company use Small Business Relief?
Not if it is a Qualifying Free Zone Person. A free zone company that is not a Qualifying Free Zone Person — including one that has elected to be taxed at the standard rates — may be able to elect it if it meets the revenue test.
What counts as revenue for the AED 3 million test?
Gross revenue under the accounting standards you apply, for the tax period. The test is applied to the current period and every previous tax period.
Is it always better to elect the relief?
Not always. In an SBR year, tax losses and net interest expenditure can't be carried forward. If you expect profits later, keeping the losses may be worth more. We compare both.
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