Tax losses
If you elect the relief, tax losses arising in that period cannot be carried forward for use in later periods. Where you expect losses you want to preserve, electing may not be the best choice.
Time-limited · to 31 Dec 2026
UAE Corporate Tax Small Business Relief explained
If your revenue is AED 3,000,000 or less, you may be able to elect to be treated as having no taxable income. Here is who qualifies, how to elect, the transitional window, and the trade-offs to weigh first.
What is Small Business Relief?
Small Business Relief is a UAE Corporate Tax measure that lets a business with revenue of AED 3,000,000 or less in a tax period elect to be treated as having no taxable income for that period. The practical effect is that no Corporate Tax is due for the period, and compliance is simplified.
It is important to understand the mechanism: the relief does not lower your rate — it treats you as if you had no taxable income at all for the period, provided you meet the conditions and elect for it. The AED 3,000,000 test is based on revenue, not profit.
Time-limited: Small Business Relief is a transitional relief. Under current guidance it is available for tax periods ending on or before 31 December 2026. Plan for the periods that follow the window.
Who qualifies?
The relief is aimed at smaller resident taxable persons. To be eligible, you generally need to meet all of the following:
- Revenue in the tax period is AED 3,000,000 or less.
- The business is a resident taxable person (subject to the FTA’s conditions).
- The tax period ends on or before 31 December 2026 (the transitional window).
- The business is not a member of a Multinational Enterprise Group or a Qualifying Free Zone Person (per the relief’s exclusions).
Because eligibility depends on the FTA’s detailed conditions, confirm your position against current FTA guidance — or ask a specialist — before relying on the relief.
How to elect for the relief
Small Business Relief is not automatic. You elect for it when you file your Corporate Tax return for an eligible period. That means two things still apply first: you must be registered for Corporate Tax with the FTA, and you must actually meet the AED 3,000,000 revenue threshold and the other conditions for the period.
Registration is mandatory regardless of whether you claim the relief — see Corporate Tax registration. Because the election is made per period, you can reassess each eligible period whether electing is the right move.
Trade-offs to weigh before electing
The relief simplifies things, but electing is not always the best outcome. Because you are treated as having no taxable income, you also forgo certain items generated in that period.
Certain reliefs and deductions
Because you are treated as having no taxable income, elements such as interest-deduction carryforwards are not generated in that period. Weigh the immediate simplicity against what you give up.
It is an election, per period
The relief is claimed by electing when you file — it is not automatic. You decide each eligible period whether electing is worthwhile for your circumstances.
In short: if you are profitable and simply want to remove a small liability, the relief is attractive. If you expect losses you want to carry forward, or you rely on reliefs that build up over time, model both options before you elect.
How AIMuhaseb helps
Know your revenue and your position
Whether Small Business Relief applies hinges on your revenue and a clear view of your taxable position — and that comes from accurate books. AIMuhaseb keeps IFRS-based double-entry accounts with real-time P&L and Balance Sheet, and computes UAE Corporate Tax from them, so you can see where you stand against the AED 3,000,000 threshold and decide with confidence. For the election itself, a UAE team can advise and file.
Real-time revenue and P&L
Corporate Tax computed from your books
See your position vs the AED 3M threshold
Optional specialist advice on electing
FAQ
Small Business Relief questions
What is UAE Corporate Tax Small Business Relief?
Small Business Relief lets a business with revenue of AED 3,000,000 or less in a tax period elect to be treated as having no taxable income for that period. This removes the Corporate Tax liability for the period and simplifies compliance. It is a transitional relief.
Who qualifies for Small Business Relief?
A resident taxable person whose revenue in the tax period is AED 3,000,000 or less may elect for the relief, subject to the FTA’s conditions and exclusions. Members of Multinational Enterprise Groups and Qualifying Free Zone Persons are excluded.
How long is Small Business Relief available?
It is a transitional relief. Under current guidance it is available for tax periods ending on or before 31 December 2026. Businesses should treat it as a defined-window measure and plan for the periods that follow.
How do I claim Small Business Relief?
The relief is not automatic — you elect for it when you file your Corporate Tax return for the eligible period. You must still be registered for Corporate Tax and meet the revenue threshold and other conditions.
What are the trade-offs of electing?
Because you are treated as having no taxable income, tax losses arising in that period cannot be carried forward, and certain reliefs (such as interest-deduction carryforwards) are not generated. Where you expect losses or want to preserve those items, electing may not be optimal.
Do I still need to register for Corporate Tax if I claim the relief?
Yes. Registration is mandatory for all taxable persons regardless of Small Business Relief. You register with the FTA, then elect for the relief when filing the return for an eligible period.
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Get started with Small Business Relief
Tell us your revenue and financial year and a UAE specialist will help you assess whether to elect the relief and handle registration and filing.