Reviewed September 2026. Small Business Relief is time-limited and election-based. Confirm the position for the relevant Tax Period before filing.

Small Business Relief can simplify the UAE Corporate Tax position for an eligible Resident Person, but it is not a blanket exemption for “small companies”. The key threshold is revenue, not profit, and the test looks at the current Tax Period and previous Tax Periods.

The core eligibility test

A Resident Person may elect for Small Business Relief when revenue is no more than AED 3,000,000 in the relevant Tax Period and in all previous Tax Periods. Under the current rules, the relief applies only to Tax Periods ending on or before 31 December 2029.

If revenue exceeded AED 3,000,000 in a previous relevant Tax Period, dropping below the threshold later does not restore eligibility for the relief.

Who cannot use it?

A Qualifying Free Zone Person cannot elect for Small Business Relief. Members of certain multinational enterprise groups are also excluded. That means the first question is not only “what is our revenue?” but also “what type of taxable person are we?”

What the election actually does

When an eligible business elects for the relief, it is treated as having no taxable income for that Tax Period. The election is made through the Corporate Tax Return; it is not automatic merely because the revenue threshold is met.

The relief can reduce current-period tax and compliance complexity, but management should understand the trade-offs. For example, tax losses generated in a Tax Period where Small Business Relief is elected cannot be carried forward from that period, and certain other deductions or reliefs are unavailable for that period.

You still need a compliance file

An eligible business still needs to register where required, maintain evidence of its revenue and submit the applicable Corporate Tax Return within the required deadline. The FTA has specifically reminded eligible persons that the simplified return still has to be filed on time.

A practical decision checklist

  • Confirm Resident Person status and the relevant Tax Period.
  • Test revenue for the current and every previous relevant Tax Period.
  • Confirm the business is not a Qualifying Free Zone Person or an excluded MNE group member.
  • Compare the benefit of the election with any tax losses, deductions or reliefs that may be affected.
  • Document the decision before submitting the return.

F&B Performance’s role: reconcile the revenue evidence, keep the eligibility schedule, model the finance impact and make sure the filing pack is built from clean books rather than assumptions.

Rule update: on 7 August 2026, the UAE Ministry of Finance announced that Small Business Relief may apply to qualifying Tax Periods ending on or before 31 December 2029, subject to the AED 3 million revenue threshold and other conditions. Confirm the latest legislation before filing.