Small Business Relief lets a smaller UAE business pay no Corporate Tax by electing to be treated as having no taxable income, and for many businesses the current year may be the last one it is available. The relief is time-limited, and unless it is extended, it closes for tax periods ending after 31 December 2026. If your business qualifies, this is the moment to make sure you are using it while you still can. Here is how the relief works and why timing matters now.
What the relief does
Small Business Relief comes from Article 21 of Federal Decree-Law No. 47 of 2022 and Ministerial Decision No. 73 of 2023. Where a resident business elects for it and meets the conditions, it is treated as having derived no taxable income for the period, so it pays 0% Corporate Tax for that period. It is a genuine simplification: no tax, and a lighter compliance burden, for businesses small enough to qualify.
The revenue test
Eligibility turns on revenue, not profit. The relief is available where revenue in the current tax period, and in every previous one, is AED 3,000,000 or less. Cross that revenue figure in any period and the relief is gone, including for later periods. Note the difference from the AED 375,000 figure: that is a taxable income threshold in the rate; this is a revenue threshold for a separate relief.
| Point | The rule |
|---|---|
| Who | A resident person that elects for the relief |
| Revenue test | AED 3,000,000 or less, this period and every previous one |
| Effect | Treated as having no taxable income; 0% for the period |
| Time limit | Available for tax periods ending on or before 31 December 2026 |
Why this year matters
The relief is not permanent. As it stands, it applies only to tax periods ending on or before 31 December 2026. Unless the rule is extended, a business with a calendar-year period will have the 2026 period as its last eligible one. That makes the current cycle the time to confirm you qualify and elect for the relief, rather than assuming it will still be there next year.
Small Business Relief is a revenue-based election, not the AED 375,000 rate band, and it is time-limited. As it stands it closes after 31 December 2026, so this may be your last eligible period.
You still register and file
Claiming the relief does not remove your other obligations. A business using Small Business Relief still registers for Corporate Tax and still files a return; it simply elects, through that return, to be treated as having no taxable income. Skipping registration or the return because you expect to owe nothing is a mistake, since the relief is claimed through the filing, not instead of it.
What to do about it
If your revenue is within AED 3,000,000, confirm you meet the test for the current period and every earlier one, and elect for Small Business Relief through your return while it is available. Do not confuse the AED 3,000,000 revenue test with the AED 375,000 income threshold, and do not skip registering and filing just because you will owe nothing. With the relief closing after 31 December 2026 as things stand, this cycle is the one to use it in, and to plan for the position that follows once it ends.
This article is general information and is not tax advice. The relief and its end date are set by Article 21 of Federal Decree-Law No. 47 of 2022 and Ministerial Decision No. 73 of 2023 and may change. We would be glad to help you claim it correctly and plan for what comes after.