Small Business Relief: A Practical Guide

By Shihabudeen Pattasseri, FTA-Registered Tax Agent (TAAN 20056925) · Updated 2026-11-03

Small Business Relief is one of the most useful features of UAE Corporate Tax for smaller companies. If you qualify and elect for it, your business is treated as having no taxable income for the period — meaning no Corporate Tax to pay, and simpler compliance.

Who qualifies

• Resident taxable persons with revenue of AED 3 million or less in the current and all previous tax periods
• Available for tax periods ending on or before 31 December 2029
• Not available to Qualifying Free Zone Persons or members of large multinational groups

How it works

The AED 3 million threshold is a revenue test, not a profit test. If your revenue has stayed at or below AED 3 million in the current period and every earlier period since Corporate Tax began, you can elect for the relief on your return. Once your revenue exceeds AED 3 million in any period, you can no longer claim it, even if revenue later falls.

What you still have to do

• Register for Corporate Tax
• File a Corporate Tax return and make the election
• Keep proper accounting records

Is it always worth electing?

Usually, but not always. Electing for relief means you cannot use tax losses or certain deductions for that period. If you have significant losses to carry forward, it can be worth modelling both options. A quick review settles it.

Frequently asked questions

What is the Small Business Relief threshold?

Revenue of AED 3 million or less in the current and all previous tax periods, for periods ending on or before 31 December 2029.

Do I still need to file a return?

Yes. You must register, file a return and make the election to claim the relief.

Can free zone companies claim Small Business Relief?

No. Qualifying Free Zone Persons and members of large multinational groups cannot claim it.

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