UAE Small Business Relief: who qualifies and how to claim it

Small Business Relief is one of the most useful features of UAE corporate tax for founders starting a consulting, technology or trading company. A qualifying business is treated as having no taxable income for the period, and files a simplified return. This guide summarises the rules, drawing on the Federal Tax Authority (FTA), Ministerial Decision No. 73 of 2023 and Ministerial Decision No. 131 of 2026.

What the relief does

• An eligible UAE resident business is treated as having no taxable income for corporate tax purposes.
• The relief is claimed by election in the corporate tax return. It is not automatic.
• An eligible business files a simplified return that requires less information.

Who can claim it

• The business must be a resident person.
• Its revenue must not exceed AED 3 million in the relevant tax period or in any previous tax period, and it must be able to show evidence of this if asked.
• Revenue is determined under the accounting standards that apply in the UAE.

How long it is available

Ministerial Decision No. 73 of 2023 originally applied the relief to tax periods ending on or before 31 December 2026. Under Ministerial Decision No. 131 of 2026, announced by the Ministry of Finance on 7 August 2026, eligible businesses can continue to claim it for tax periods ending on or before 31 December 2029.

Who cannot claim it

• Qualifying Free Zone Persons. A free zone company relying on the 0% regime cannot also use Small Business Relief. See our Qualifying Free Zone Person guide.
• Constituent companies of multinational enterprise groups with consolidated group revenue above AED 3.15 billion.

The trade-offs

• For any tax period in which the relief is elected, tax losses and net interest expenditure for that period cannot be carried forward to later periods. A business expecting early losses should weigh this before electing.
• If the FTA finds that a business has been artificially separated to stay below the threshold, this is treated as an arrangement to obtain a tax advantage and can be counteracted.
• Once revenue exceeds AED 3 million in any period, the relief is not available for later periods.

What you still need to do

• Register for corporate tax. A new UAE company must register within three months of its incorporation.
• File a corporate tax return for every tax period, within nine months of the end of the period, even when no tax is due.
• Keep financial records that support the return.

Individuals running a business are in a different position: they only register once business turnover exceeds AED 1 million in a calendar year. See our guide to corporate tax for freelancers and sole establishments.

What to do

• Check each year that revenue is within the limit, measured under the applicable accounting standards.
• Compare Small Business Relief with the free zone 0% regime before you choose where to set up.
• Decide, before filing, whether preserving a loss is worth more than electing the relief for that period.
• File on time through EmaraTax or an FTA-approved tax agent.

Our corporate tax and accounting and virtual CFO services cover registration, bookkeeping and the annual return.

Sources

• CMS: UAE corporate tax Small Business Relief criteria (Ministerial Decision No. 73 of 2023)
• The National: UAE extends corporate tax relief for small businesses until 2029
• Gulf News: UAE reminds small businesses to file corporate tax returns even if no tax is due
• Federal Tax Authority: New decision on specified timeframes for corporate tax registration
• Federal Tax Authority: Corporate tax returns within nine months of the end of the tax period

This page gives general information as at the date shown and is not advice for your specific situation. Rules in other countries are summarised for orientation; your home-country position should be confirmed before you act.