Key takeaways
- Small Business Relief is a UAE corporate tax election that treats a qualifying company as having no taxable income for a tax period, provided its revenue is AED 3,000,000 or less in that period and in every earlier tax period (FTA, checked October 2026).
- Small Business Relief is available for tax periods ending on or before 31 December 2029, after the Ministry of Finance extended it from the original 31 December 2026 cut-off (Ministerial Decision No. 131 of 2026, announced 7 August 2026).
- A Qualifying Free Zone Person cannot claim Small Business Relief, and neither can a member of a multinational group with consolidated revenue above AED 3.15 billion.
- Small Business Relief is not automatic: a UAE business has to elect it for each tax period through its corporate tax return, and it still has to file that return within nine months of the period end.
- Claiming Small Business Relief means giving up other reliefs and deductions for that period, and the Ministry of Finance's loss carry-forward rules apply only to periods where the relief isn't elected.
What is Small Business Relief and who qualifies?
Small Business Relief lets a resident person with limited revenue be treated as having no taxable income for a tax period, so no corporate tax is payable for it. The FTA says the person must be a resident person (a company or a natural person), must elect the relief, and must have revenue of AED 3,000,000 or less in the current tax period and in all previous tax periods.
The legal basis is Article 21 of Federal Decree-Law No. 47 of 2022 on the Taxation of Corporations and Businesses, with the AED 3 million threshold set by Ministerial Decision No. 73 of 2023. The Ministry of Finance announced that decision on 6 April 2023.
| Condition | Requirement | Source |
|---|---|---|
| Tax residency | Resident person (juridical or natural) | FTA |
| Revenue test | AED 3,000,000 or less in the current and all previous tax periods | FTA |
| Election | Made for each tax period, through the corporate tax return | FTA |
| Qualifying Free Zone Person | Excluded | Ministry of Finance |
| Multinational group member | Excluded if consolidated group revenue exceeds AED 3.15 billion | Ministry of Finance |
Has Small Business Relief been extended beyond 2026?
Yes. Small Business Relief now covers tax periods ending on or before 31 December 2029, rather than 31 December 2026. The Ministry of Finance announced Ministerial Decision No. 131 of 2026 on 7 August 2026, and it keeps the AED 3 million revenue threshold unchanged.
The original decision applies to tax periods starting on or after 1 June 2023. So a company with a calendar-year financial year can, if it stays within the test, elect the relief for each year from 2024 to 2029. Check the full decision text and any later FTA guidance before you plan around the last years, because the Ministry's announcement page summarises the decision rather than reproducing it.
What does the AED 3 million revenue test actually measure?
The test looks at revenue in the current tax period and in every earlier tax period, so one year above AED 3 million ends eligibility for good. The FTA gives an example: a Sharjah business with AED 4.3 million revenue in 2025 cannot claim the relief for 2026, even if 2026 revenue is only AED 1.9 million.
That makes the test a one-way door. Say a trading company bills AED 2.8 million in its first period, AED 2.9 million in its second and AED 3.2 million in its third (a hypothetical example). It can elect the relief for the first two periods; from the third period onward the relief is gone, and it moves to ordinary corporate tax treatment.
Revenue is measured under accounting standards accepted in the UAE, so it is gross revenue, not profit. A business with AED 3.4 million of revenue and a loss still fails the test.
How do I claim Small Business Relief?
You claim Small Business Relief by choosing it in your corporate tax return on EmaraTax; there is no separate application. The FTA says businesses that elect the relief file a simplified return, and that being eligible does not remove the obligation to file a corporate tax return.
- Confirm your company is a resident person and is not a Qualifying Free Zone Person or an excluded multinational group member.
- Add up revenue for the current tax period and check every earlier tax period was AED 3,000,000 or less.
- Log in to EmaraTax (tax.gov.ae) and open the corporate tax return for the period.
- Select the Small Business Relief election and complete the simplified return.
- Submit within nine months of the end of the tax period.
For a financial year ending 31 December 2025, the FTA set the deadline at 30 September 2026. Late submission costs AED 500 for each month or part of a month in the first 12 months, then AED 1,000 for each month from the 13th month (FTA, September 2025).
If you'd rather not track these dates by hand, the free UAE compliance calendar lists your company's tax and compliance deadlines, personalised from a few questions, as a PDF and calendar file.
What do I give up by electing Small Business Relief?
Electing Small Business Relief means the company is treated as having no taxable income, and the FTA states that other exemptions, reliefs and deductions are not available for that period. Transfer pricing documentation is not required, but the arm's length principle still applies to related party dealings.
Losses need care. The Ministry of Finance says that if you don't elect the relief, tax losses and disallowed net interest expenditure can be carried forward to later periods in which the relief is not elected. The reverse follows: a loss in a period where you elect the relief gives you no loss to use later. A company expecting to grow past AED 3 million, or one making a real loss now, should compare the two routes before electing.
AED 3,000,000: maximum revenue, in the current and every previous tax period, for a resident person to elect Small Business Relief. Source: FTA, Small Business Relief page, and Ministerial Decision No. 73 of 2023, checked 28 October 2026.
What most guides don't tell you
- Splitting a business to stay under the limit is a risk. The Ministry of Finance states the FTA may treat artificial separation of a business to remain under the threshold as an arrangement to obtain a corporate tax advantage under the general anti-abuse rule in Article 50(1) of the corporate tax law.
- Relief does not mean no filing. The FTA has said that eligible businesses still have to file, and a company that assumes it owes nothing and skips the return faces the penalties above.
- Free zone status can decide the answer. A company in a free zone such as SHAMS is not automatically excluded; the exclusion applies to a Qualifying Free Zone Person. Whether your company has that status, and what it means for the 0% rate on qualifying income, is a separate test, so confirm it before you choose between the two regimes.
- Look back before looking forward. The revenue test counts earlier tax periods, so check your first period too, before you assume you're eligible for 2026 or 2027.
Which deadlines apply to your company?
Small Business Relief changes your corporate tax bill, not your filing calendar: the return, the election and the nine-month deadline all still apply. The free UAE compliance calendar maps your corporate tax, VAT and licence dates in one place.
Frequently asked questions
Can I claim Small Business Relief if my revenue is just over the limit?
No; the relief is available only where revenue is AED 3,000,000 or less in the current and all previous tax periods. A company slightly over the limit pays corporate tax under the normal rules, and once a period exceeds the limit the relief is not available for later periods either.
Is Small Business Relief still available after 2026?
Yes; Ministerial Decision No. 131 of 2026, announced on 7 August 2026, extends it to tax periods ending on or before 31 December 2029. The AED 3 million threshold stays the same.
Do sole establishments need to register for corporate tax?
The corporate tax rules for individuals running a business depend on their own conditions, and a natural person can be a resident person eligible to elect the relief. Check the FTA's guide on the taxation of natural persons for the turnover test that applies to your situation.
When is my first corporate tax return due?
A taxable person must file its corporate tax return and pay any tax within nine months of the end of the tax period. For a financial year ending 31 December 2025, the FTA set the deadline at 30 September 2026.
About Qawi · Qawi is a corporate services firm licensed in the Sharjah Media City (SHAMS) free zone, handling company formation, visas and PRO, bookkeeping, VAT and corporate tax for UAE businesses. Guides are researched from FTA, Ministry of Finance and free zone sources. Qawi on LinkedIn
Sources
- FTA: Small Business Relief (Corporate Tax)
- Ministry of Finance: Decision on Small Business Relief for Corporate Tax Purposes (Ministerial Decision No. 73 of 2023)
- Ministry of Finance: Extension of Small Business Relief until 31 December 2029 (Ministerial Decision No. 131 of 2026)
- FTA: Taxable persons eligible for Small Business Relief must submit simplified returns
- FTA: Corporate tax return and payment deadlines
Last checked: 28 October 2026
This is general information, not tax or legal advice for your specific situation.