Short answer: If your UAE business earns AED 3 million or less in a tax period, you can elect Small Business Relief (SBR) and be treated as having no taxable income, so you pay 0% Corporate Tax for that period. In August 2026 the Ministry of Finance extended SBR to cover tax periods ending on or before 31 December 2029 (previously 31 December 2026).
You still have to register for Corporate Tax and file a return. SBR is not automatic.
What changed in 2026?
- Before: SBR applied only to tax periods ending on or before 31 December 2026.
- Now: A Ministerial Decision issued in August 2026 extends it to tax periods ending on or before 31 December 2029.
- The revenue limit has not changed: it is still AED 3,000,000 per tax period.
For a calendar-year business, that means SBR can be used for FY2024 through FY2029, provided you meet the test every year.
Who qualifies?
You can elect SBR if all of the following are true:
- You are a resident person (a UAE company, or an individual running a licensed business).
- Your revenue for the current tax period is AED 3 million or less.
- Your revenue has not exceeded AED 3 million in any earlier tax period that started on or after 1 June 2023.
Who cannot use SBR?
- Qualifying Free Zone Persons (QFZPs), who use the 0% free zone regime instead
- Members of Multinational Enterprise Groups with consolidated revenue above AED 3.15 billion
- Non-resident persons
The “once over, always out” trap
If your revenue crosses AED 3 million in any single tax period, you lose SBR for every later period, even if revenue drops again.
Example: A trading company earns AED 2.4M in 2024, AED 3.2M in 2025 and AED 2.7M in 2026. It can use SBR for 2024 only. From 2025 onward it is taxed normally (9% on profit above AED 375,000).
If you are close to the limit, plan your invoicing and revenue timing with an accountant before year-end.
How to claim SBR in EmaraTax (step by step)
- Register for Corporate Tax on EmaraTax if you haven’t already. Late registration carries an AED 10,000 penalty.
- Keep proper books for the period. Revenue must be supported by your financial records.
- Open your Corporate Tax return for the period.
- In the Elections section, choose Small Business Relief.
- Submit the return within 9 months of the end of the tax period.
Important: You must make the election every year in that year’s return. Once the return is submitted, the election for that period cannot be changed.
What you give up when you elect SBR
- Tax losses from that period cannot be carried forward.
- Disallowed net interest from that period is lost.
- Some reliefs and transfer-pricing documentation rules are simplified. Ask your adviser whether this matters for you.
If you expect a loss this year and big profits later, it can make more sense not to elect SBR and to carry the loss forward instead.
Don’t split the business to stay under AED 3M
Breaking one business into several licences just to keep each under the threshold can be treated as artificial separation. The FTA can deny the relief, recover the tax and add penalties.
Quick checklist
- ☐ Corporate Tax registration done (TRN for CT)
- ☐ Books of accounts maintained for the full period
- ☐ Revenue ≤ AED 3M this period and every period since June 2023
- ☐ Not a QFZP / large MNE member / non-resident
- ☐ SBR elected in the return, filed within 9 months
FAQ
Is Small Business Relief extended beyond 2026?
Yes. In August 2026 the UAE Ministry of Finance extended SBR to tax periods ending on or before 31 December 2029.
Do I still need to file a Corporate Tax return if I use SBR?
Yes. You must register and file a return each year, and elect SBR in it.
Can a free zone company claim Small Business Relief?
A free zone company that is a Qualifying Free Zone Person cannot. A free zone company that is not a QFZP can, if it meets the AED 3M test.
Is the AED 3 million test based on revenue or profit?
Revenue (gross income), not profit.
What happens if I cross AED 3 million once?
You permanently lose SBR for all later tax periods.
Need help deciding whether to elect SBR, or with your Corporate Tax return? Your Office Partners handles Corporate Tax registration, bookkeeping and return filing for small businesses in Dubai. Talk to our tax team →
Related guides: Corporate tax registration in UAE · VAT & corporate tax services · Accounting & bookkeeping services · Corporate tax penalty waiver 2026
Sources: UAE Ministry of Finance announcement, August 2026 (as reported by Khaleej Times and The National); Ministerial Decision No. 73 of 2023 on SBR.
