Small Business Relief: who qualifies and what it means
Small Business Relief lets a small business be treated as having no taxable income for a year. It must be elected on the return, and it has conditions and a cost worth knowing.
Key facts from the law
A Resident Person whose Revenue is at or below the threshold may elect to be treated as having no Taxable Income for the Tax PeriodCorporate Tax Law, Art. 21
The Revenue threshold is AED 3,000,000, for the Tax Period and each previous Tax PeriodMinisterial Decision 73/2023, Art. 2(1)
The relief applies only to Tax Periods ending on or before 31 December 2026Ministerial Decision 73/2023, Art. 2(2)
Not available to a Qualifying Free Zone Person or a member of a Multinational Enterprise GroupMinisterial Decision 73/2023, Art. 3
Tax Losses incurred in a year Small Business Relief is elected cannot be carried forward; earlier losses are kept for later years without the reliefMinisterial Decision 73/2023, Art. 4
Net Interest Expenditure of a Small Business Relief year cannot be carried forward; earlier carried-forward amounts are keptMinisterial Decision 73/2023, Art. 5
Revenue is determined under the accounting standards applied in the StateMinisterial Decision 73/2023, Art. 2(4)
Revenue on the return is the total gross income from all sources before any expenses or reliefsFTA Corporate Tax Returns Guide, p. 35
Revenue is all income earned, including the proceeds of selling an asset (not only the gain)FTA Small Business Relief Guide, p. 25
Each point is checked against the text of the law or FTA guide held by TI.
It's a relief letting small businesses with revenue under AED 3 million pay no Corporate Tax for that year, provided you're a UAE resident business and you elect for it in your tax return each year.
Article 21(1) of the Corporate Tax Law allows a Resident Person to elect no Taxable Income where Revenue stays below a Ministerial threshold and other conditions are met.
Ministerial Decision No. 73 of 2023 sets that threshold at AED 3,000,000 per Tax Period, applying to Tax Periods from 1 June 2023 through those ending on or before 31 December 2026.
Electing the relief switches off Exempt Income, Reliefs, Deductions, Tax Loss relief and Article 55, and any Tax Losses from that period cannot be carried forward.
It depends on your revenue and status. You qualify if you're a UAE-resident business with revenue of AED 3 million or less in this and every earlier tax period ending on or before 31 December 2026, and you're not part of a multinational group or a Qualifying Free Zone Person. Make the election in your Tax Return.
A Resident Person that is a Taxable Person may elect to be treated as having no Taxable Income for a Tax Period where its Revenue and that of previous periods does not exceed a threshold set by the Minister (Article 21(1)).
Under FTA guidance the threshold is AED 3,000,000 for the relevant and all previous Tax Periods, with the relief available for Tax Periods ending on or before 31 December 2026; members of MNEs and Qualifying Free Zone Persons are excluded. Based on FTA guidance
The FTA bulletin confirms the same conditions — Resident Taxable Person, Revenue at or below AED 3 million in the relevant and previous periods ending on or before 31 December 2026, and not an MNE member or Qualifying Free Zone Person. Based on FTA guidance
AED 3,000,000 or less in revenue for the current and every prior tax period, and this only applies up to tax periods ending on or before 31 December 2026.
A Resident Taxable Person may elect to be treated as having no Taxable Income if its Revenue for the relevant and all previous Tax Periods does not exceed the Ministerial threshold.
That threshold is set at AED 3,000,000 per Tax Period, applying to Tax Periods starting on or after 1 June 2023 and ending on or before 31 December 2026.
You can claim it for tax years up to and including one ending on or before 31 December 2026, as long as your revenue stays at or under AED 3 million each year.
A Resident Taxable Person may elect to be treated as having no Taxable Income for a Tax Period if its Revenue for that and prior periods stays within a Ministerial threshold and other prescribed conditions are met.
The Minister set that revenue threshold at AED 3,000,000 per Tax Period, applicable to Tax Periods commencing on or after 1 June 2023 and continuing only for periods ending on or before 31 December 2026.
No. You have to actively choose it every year by making an election in your Corporate Tax Return - it's not given automatically.
Article 21(1) allows a Resident Taxable Person to elect for Small Business Relief where revenue stays under the Ministerial threshold and other prescribed conditions are met.
FTA guidance confirms the taxpayer must first register for Corporate Tax and then elect for the relief in each Tax Return filed, as the relief only applies for periods where the election is made. Based on FTA guidance
No. If your company is a Qualifying Free Zone Person, it cannot claim Small Business Relief — but it already gets a 0% tax rate on its qualifying income, so this usually isn't a disadvantage.
A Resident Person can elect Small Business Relief only if revenue is within the Minister's threshold and it meets all other conditions the Minister prescribes.
One of those prescribed conditions is that the Person must not be a Qualifying Free Zone Person.
FTA guidance explains this exclusion exists because Qualifying Free Zone Persons already benefit from a 0% Corporate Tax rate on their Qualifying Income. Based on FTA guidance
No. Any losses made in a year you claim Small Business Relief are lost and cannot be carried forward. But losses from earlier years, before you elected the relief, can still be carried forward and used later once you stop claiming the relief.
Losses incurred in a Tax Period where Small Business Relief is elected cannot be carried forward to any later Tax Period.
Losses carried forward from years before the relief was elected can still be used in later years where the relief is not elected, subject to the 75% offset cap and other conditions of Article 37.
You lose Small Business Relief for that year - once your revenue goes above AED 3 million in any tax period, you can't elect for relief for that period and must calculate your taxable income and pay corporate tax normally.
The Small Business Relief threshold is AED 3,000,000 of Revenue for the relevant Tax Period and each previous Tax Period.
A Taxable Person cannot elect for the relief if Revenue in any relevant or previous Tax Period exceeded this threshold.
Once relief no longer applies, the business must determine its Taxable Income for that Tax Period in the normal way and can then use previously carried-forward Tax Losses against positive Taxable Income. Based on FTA guidance
Guidance only, not tax advice. Answers were drafted by TI from the FTA’s published law and last updated on 15 September 2026; rely on the official text and a registered tax agent before you file.