Small Business Relief is an elective UAE Corporate Tax relief designed to reduce the compliance burden on small businesses and startups. A UAE resident taxable person whose revenue in the current and all previous relevant tax periods is below AED 3,000,000 per tax period (set by Ministerial Decision No. 73 of 2023) can elect to be treated as having no taxable income for that period, meaning no corporate tax is due, and simplified record-keeping requirements generally apply. This relief is time-limited: originally available for tax periods ending on or before 31 December 2026, then extended by Ministerial Decision No. 131 of 2026 to cover tax periods ending on or before 31 December 2029. It is not automatic, it must be actively elected when filing, period by period. It's also not available to certain categories, such as Qualifying Free Zone Persons (who have their own separate 0%-rate regime) or members of Multinational Enterprise Groups meeting specified revenue thresholds. Because the relief is based on revenue, not profit, a small business with thin margins but revenue close to or above the AED 3 million threshold needs to plan for the possibility of losing eligibility as it grows, rather than assuming the relief will always apply.
Example: A small UAE consulting firm with AED 2.5 million annual revenue elects for Small Business Relief on its corporate tax return, meaning it owes no corporate tax for that period despite technically being subject to the corporate tax law.
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