Small Business Relief in the UAE: Who Can Benefit Until 2029?

Small businesses in the UAE may reduce their Corporate Tax compliance burden through the Small Business Relief regime. Where the relevant conditions are met, the relief allows an eligible business to be treated as having no Taxable Income for the relevant Tax Period. This can result in no Corporate Tax being payable; however, the business must still register for Corporate Tax, submit a tax return and retain appropriate supporting records.
tax.gov

The regime is available to qualifying resident persons for Tax Periods ending on or before 31 December 2029. It may be particularly relevant for small trading, consulting, service and online businesses, as well as newly established entrepreneurs operating in the UAE.

Who may be eligible?

The key criterion is revenue. A company or an individual conducting business may elect for Small Business Relief where its revenue does not exceed AED 3 million:

• during the relevant Tax Period;
• during all previous Tax Periods to which UAE Corporate Tax applies; and
• provided that the person is a UAE Resident Person and meets the other applicable legal requirements.

The Federal Tax Authority emphasises that taxpayers must be able to substantiate their revenue and eligibility. Businesses should therefore keep records that allow the FTA to verify the information reported in the Corporate Tax return and the basis for claiming the relief.
tax.gov

It is important to note that the AED 3 million threshold applies to revenue, rather than profit. A business with modest profits — or even a loss — may not be eligible if its revenue exceeds the threshold.

What does the relief provide?

Where an eligible business elects for Small Business Relief in its tax return, it is treated as having no Taxable Income for Corporate Tax purposes for that Tax Period. In practice, this means:

• no Corporate Tax is payable for the relevant period;
• the business submits a simplified Corporate Tax return; and
• the amount of information required to be filed with the FTA is reduced.

The relief does not remove the underlying compliance obligations. The business must remain registered for Corporate Tax, file its return through EmaraTax within the prescribed deadline and retain accounting and supporting documentation.

What should businesses do?

Businesses planning to use the relief should take the following steps:

1. Register for UAE Corporate Tax through the EmaraTax platform, if not already registered.
2. Review revenue for the current and previous Tax Periods.
3. Confirm UAE tax-residency status and assess the other applicable eligibility conditions.
4. Maintain records of transactions, revenue, assets, liabilities and ownership interests.
5. Elect for Small Business Relief in the Corporate Tax return.
6. File the simplified return and settle any tax due by the applicable deadline.

For businesses with a financial year ending on 31 December 2025, the deadline for filing the Corporate Tax return and paying any Corporate Tax due is 30 September 2026. Filing remains mandatory even where the business qualifies for Small Business Relief.
tax.gov

Key considerations

Small Business Relief is not applied automatically. Eligible businesses must make the election in their Corporate Tax return. Failure to make the election when filing may mean that the simplified treatment cannot be applied for that Tax Period.

Businesses should also avoid confusing a nil Corporate Tax liability with an absence of tax obligations. Late registration, late filing or insufficient records may lead to penalties and other compliance consequences. The FTA recommends preparing well ahead of the filing deadline in order to avoid errors, delays and unnecessary risk.

How MBN can help

MBN assists UAE businesses with assessing their eligibility for Small Business Relief, reviewing their Corporate Tax status, organising accounting data and supporting documentation, and preparing and submitting Corporate Tax returns through EmaraTax.

A timely review of your revenue, accounts and tax position can help your business use available reliefs correctly while reducing compliance risk.

This article is for general informational purposes only and does not constitute individual tax advice. Eligibility should be assessed based on the business structure, the taxpayer’s status and the relevant Tax Period.


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