Guide · updated August 2026

Small Business Relief: the UAE's zero-tax lifeline for SMEs

Small Business Relief (Ministerial Decision No. 73 of 2023) lets qualifying small businesses pay no corporate tax at all — but it's an election with conditions and a hard end date. Here's how it works and where owners get caught out.

The test: AED 3 million revenue

You can elect the relief if your revenue is AED 3,000,000 or less in the relevant tax period and in every previous tax period. It's a revenue test, not a profit test — a business with AED 2.9M revenue and AED 1M profit qualifies; one with AED 3.1M revenue and AED 200K profit does not.

Cross AED 3M once and you lose eligibility permanently — the test looks at all previous periods too. If Q4 revenue would tip you over the line, understand the cost before invoicing.

The deadline: 31 December 2026

The relief only applies to tax periods ending on or before 31 December 2026. For a business with a December year-end, 2026 is the final year — after that, standard 0%/9% bands apply to everyone.

Who cannot use it

Qualifying Free Zone Persons (they have their own 0% regime).
Members of multinational groups with consolidated revenue over AED 3.15 billion.
Businesses artificially split into pieces to stay under AED 3M — the FTA treats this as tax abuse.

How to elect

Register for corporate tax as normal (the relief doesn't remove the registration duty).
File your return within 9 months of year end.
Tick the Small Business Relief election on the return.

That's it — you're treated as having no taxable income for that period. Note the trade-offs: while relieved, you cannot carry forward tax losses or claim net interest deductions from that period.

Should you elect it?

Almost always yes if you qualify — with one exception: a business making losses might prefer to skip the relief and bank the loss to offset future profits. That's a one-question conversation with an advisor; get a quote through our advisor form.

Estimate your position first with the corporate tax calculator — it has Small Business Relief built in.

General information, not tax advice. Confirm with a licensed UAE tax agent before filing.