Corporate Tax (UAE) — Small Business Relief
Small Business Relief is available for UAE businesses with revenue under AED 3 million, but it's an election, not an automatic exemption — and it ends 31 December 2026. FMCA helps UAE and KSA businesses confirm current eligibility and plan the transition to standard corporate tax before the relief period closes.
Reviewed by FMCA's Senior Tax Advisory Team — registered FTA tax agents serving clients across the UAE and Saudi Arabia.
Four concrete conditions determine eligibility — meeting one isn't the same as meeting all of them.
Total revenue for the relevant tax period must stay under the AED 3 million threshold — measured on revenue, not net profit.
Relief is elected on the tax return — it is not applied automatically just because revenue is under the threshold.
Available to UAE resident taxable persons — certain entity types and Qualifying Free Zone Persons are treated differently.
Relief can be elected for tax periods ending on or before this date — the last chance to elect is this filing cycle.
Businesses currently electing relief move to the standard regime the following tax period — the transition isn't automatic to plan for.
Income over AED 375,000 becomes taxable at the standard 9% rate from the following tax period — cash flow planning needs to account for this now, not in January 2027.
Standard documentation and reporting obligations that relief simplified come back into effect for the following tax period.
The FTA can still review prior periods where relief was claimed — accurate revenue records matter even after relief ends.
This is why FMCA reviews Small Business Relief eligibility as part of ongoing corporate tax management, built on records already maintained through bookkeeping — not assessed once a year in isolation.
The businesses that plan the transition ahead of time avoid the businesses that discover it at filing time.
Our Approach
Relief eligibility can change year to year as revenue grows — FMCA reassesses it every filing period rather than assuming last year's answer still applies.
How We Work
Illustrative scenarios based on the kind of work we do — not descriptions of specific named clients.
Revenue tracked and confirmed under the AED 3 million threshold ahead of the filing deadline, with the election made on time.
Cash flow impact of the standard 9% rate modeled a full year ahead of an expected revenue crossing above the threshold.
A mid-year revenue spike flagged early, confirming the business would lose eligibility before the filing deadline rather than after.
Related Insights
FAQ
No — it's elected on the tax return each period. Revenue under AED 3 million qualifies you to elect it, but you still need to make the election.
Eligibility is assessed for the full tax period — if total revenue for that period exceeds the threshold, relief isn't available for that period, even if it was under the threshold for part of the year.
Yes — a return is still required. Relief affects the tax owed, not the filing obligation itself.
Businesses move to the standard 9% rate on income over AED 375,000 from the following tax period, along with standard filing requirements.
Relief is assessed each tax period against that period's revenue — but the relief itself is only available for periods ending on or before 31 December 2026, regardless of eligibility.
Tell us where things stand and a senior consultant will get back to you directly — not a call centre.
