UAE Small Business Relief has been extended for three additional years. Eligible businesses may now claim the relief for tax periods ending on or before December 31st, 2029, rather than December 31st, 2026.
The extension was introduced through Ministerial Decision No. 131 of 2026, issued by the UAE Ministry of Finance.
The decision does not change the AED 3 million revenue threshold or make the relief automatic. Eligibility continues to depend on the business’s structure, tax period and revenue history. Eligible businesses must also elect to claim the relief when submitting their UAE Corporate Tax return.
UAE Small Business Relief overview
| Requirement | Current rule |
|---|---|
| Revenue threshold | AED 3 million or less |
| Relevant period | Tax periods beginning on or after June 1st, 2023 and ending on or before December 31st, 2029 |
| How to claim | Elect through the Corporate Tax return |
| Tax treatment | The business is treated as having no taxable income for the relevant period |
| Filing requirement | A simplified Corporate Tax return must still be filed |
| Main exclusions | Qualifying Free Zone Persons and certain multinational enterprise groups |
What is UAE Small Business Relief?
To claim Small Business Relief, a business must meet all the following conditions:
- It must be a Resident Person for UAE Corporate Tax purposes. This can include a juridical person, such as a company, or an eligible natural person conducting a business.
- Its revenue must not exceed AED 3 million in the relevant tax period.
- Its revenue must not have exceeded AED 3 million in any previous tax period beginning on or after June 1st, 2023.
- The relevant tax period must end on or before December 31st, 2029.
- The business must elect to apply Small Business Relief when submitting its Corporate Tax return.
Meeting the revenue threshold alone does not make a business automatically eligible.
Who cannot claim Small Business Relief?
Small Business Relief is not available to:
- A Qualifying Free Zone Person
- A member of a multinational enterprise group with consolidated global revenue exceeding AED 3.15 billion
- A business that has exceeded the AED 3 million revenue threshold in the current or any previous relevant tax period
Not every free zone company is excluded. A business established in a free zone may still qualify if it is not treated as a Qualifying Free Zone Person and meets all the other eligibility requirements.
Businesses also cannot artificially divide their operations among separate entities to remain below the AED 3 million threshold. If the Federal Tax Authority (FTA) determines that a business has been separated to obtain a Corporate Tax advantage, the arrangement may be challenged under the general anti-abuse provisions of the UAE Corporate Tax Law.
How does the AED 3 million threshold apply?
The AED 3 million Small Business Relief threshold is based on revenue, not profit.
For example:
- A company with AED 3.2 million in revenue would exceed the threshold, even if it recorded a loss.
- A company with AED 2.8 million in revenue may qualify, even if it generated a substantial profit, provided it meets the other conditions.
The threshold must be satisfied during the relevant tax period and every previous tax period beginning on or after June 1st, 2023.
Once a business’s revenue exceeds AED 3 million in any relevant tax period, it cannot claim Small Business Relief in a later period, even if its revenue subsequently falls below the threshold.
How can a business claim UAE Small Business Relief?
Small Business Relief does not apply automatically when a business’s revenue is below AED 3 million. An eligible business must elect to claim the relief through its Corporate Tax return on the EmaraTax platform.
Before making the election, the business should:
- Review its revenue for the current and all previous relevant tax periods.
- Confirm that none of the exclusions apply.
- Check whether it is classified as a Qualifying Free Zone Person.
- Ensure its accounting records support the revenue reported.
- Assess whether claiming the relief is the most suitable option for its overall tax position.
- Elect for Small Business Relief when filing its Corporate Tax return.
The election must be made separately for each eligible tax period.
What records must the business maintain?
According to the Federal Tax Authority, businesses claiming Small Business Relief must retain sufficient records to demonstrate their revenue and eligibility.
These records may include:
- Sales invoices and transaction records
- Bank statements
- Details of assets and liabilities
- Ownership information
- Accounting records
- Other supporting financial documents
The FTA may request this information to verify that the business remained below the AED 3 million threshold and met the other eligibility conditions.
Should every eligible business claim Small Business Relief?
Small Business Relief can reduce the amount of Corporate Tax payable and simplify filing, but claiming it may not always produce the best outcome.
A business that elects for the relief cannot apply other exemptions, reliefs or deductions for the same tax period. Businesses with tax losses, significant deductible expenditure or changing revenue should therefore assess their complete tax position before making the election.
For example, a loss-making business may need to consider whether claiming Small Business Relief could affect how its tax losses are treated in future periods.
Eligibility and suitability are two separate questions. A business may qualify for the relief but still benefit from reviewing its wider tax position before claiming it.
Does Small Business Relief remove UAE Corporate Tax obligations?
No. Claiming Small Business Relief does not remove a business’s UAE Corporate Tax registration, accounting or filing obligations.
For most taxable businesses, the standard UAE Corporate Tax rates are:
- 0% on taxable income up to AED 375,000
- 9% on taxable income exceeding AED 375,000
However, having no revenue, recording a loss or remaining below the AED 375,000 taxable income threshold does not automatically remove the obligations of a Taxable Person.
Businesses claiming Small Business Relief must still complete three essential steps.
- Register for UAE Corporate Tax
Taxable Persons must register with the FTA and obtain a Corporate Tax Registration Number within the applicable deadline.
Juridical persons subject to Corporate Tax must register even if they do not expect to have tax payable. Different rules apply to natural persons, who are generally subject to Corporate Tax only when turnover from their UAE business activities exceeds AED 1 million during a calendar year.
- Maintain proper accounting records
Businesses must retain accurate financial records to support their revenue, calculate taxable income and substantiate any relief claimed.
These records are also necessary if the FTA reviews the information reported in the Corporate Tax return.
- File an annual Corporate Tax return
A Corporate Tax return must generally be submitted within nine months of the end of the relevant tax period.
Businesses claiming UAE Small Business Relief must still file their return, although eligible businesses may submit a simplified Corporate Tax return.
Taxpayers whose financial year ended on December 31st, 2025 must submit their Corporate Tax returns and settle any Corporate Tax due by September 30th, 2026.
Frequently asked questions about UAE Small Business Relief
Is UAE Small Business Relief automatic?
No. An eligible business must elect to claim Small Business Relief when submitting its Corporate Tax return. The election must be made for each relevant tax period.
What is the revenue limit for Small Business Relief in the UAE?
The revenue limit is AED 3 million. The business must remain at or below this threshold during the current tax period and all previous relevant tax periods beginning on or after June 1st, 2023.
Is the AED 3 million threshold based on revenue or profit?
It is based on revenue, not profit. A loss-making company can still exceed the threshold if its total revenue is more than AED 3 million.
Can a free zone company claim Small Business Relief?
A free zone company may claim the relief if it meets the eligibility conditions and is not a Qualifying Free Zone Person. Qualifying Free Zone Persons are specifically excluded.
Does Small Business Relief mean a business does not need to file a Corporate Tax return?
No. Eligible businesses must still register for UAE Corporate Tax and file a return. Those claiming the relief may submit a simplified Corporate Tax return.
Can a natural person claim Small Business Relief?
A Resident natural person conducting a business may be eligible if they are subject to UAE Corporate Tax and meet the Small Business Relief conditions. Natural persons are generally subject to Corporate Tax when turnover from their UAE business activities exceeds AED 1 million in a calendar year.
What happens if a business exceeds AED 3 million in revenue?
Once the business exceeds AED 3 million in any relevant tax period, it cannot claim Small Business Relief for that period or any subsequent period, even if its revenue later falls below the threshold.
When does UAE Small Business Relief end?
Under the current rules, the relief may be claimed for eligible tax periods ending on or before December 31st, 2029.
Check whether your business qualifies for Small Business Relief
The extension of UAE Small Business Relief gives eligible start-ups and smaller businesses three additional years to benefit from simplified Corporate Tax treatment.
However, claiming the relief requires more than remaining below the AED 3 million revenue threshold. Businesses must review their revenue history, confirm that no exclusions apply, make a valid election and maintain reliable financial records.
Not sure whether your business can claim Small Business Relief? Book your free tax consultation and our tax specialists will assess your eligibility and assist with your UAE Corporate Tax registration, accounting and filing requirements.
