Small Business Relief allows eligible UAE businesses to pay 0% Corporate Tax. Here is who qualifies, how to elect it, and what changes after 31 December 2026.
Under Federal Decree-Law No. 47 of 2022, UAE Corporate Tax is charged at 0% on taxable income up to AED 375,000 and 9% on taxable income above AED 375,000. This means a business with AED 374,999 in net profit pays zero Corporate Tax. A business with AED 500,000 in net profit pays 9% only on AED 125,000 (the amount above the threshold) — which equals AED 11,250.
Beyond the standard 0%/9% threshold structure, the UAE CT Law provides Small Business Relief for eligible businesses. Under SBR, a qualifying business is treated as having no taxable income for the relevant tax period — it pays zero Corporate Tax and has simplified compliance obligations. SBR is available for tax periods ending on or before 31 December 2026. It is a transitional measure and is not permanent.
Revenue for SBR purposes means the gross income of the business in the tax period — not net profit. A business with AED 2.9 million in gross revenue but AED 2.8 million in expenses still qualifies for SBR (as long as previous periods also met the AED 3 million test). Once revenue exceeds AED 3 million in any period, SBR is lost and cannot be elected again.
Electing Small Business Relief does not exempt a business from registering with the FTA. All UAE businesses must register for Corporate Tax. The penalty for non-registration is AED 10,000, regardless of whether you ultimately owe any tax. Register on EmaraTax, then elect SBR in your return if eligible.
SBR is a transitional relief available only for tax periods ending on or before 31 December 2026. From the 2027 tax year, there is currently no legislative extension of SBR. Small businesses with revenue below AED 375,000 in net profit will still pay 0% under the standard rates — but businesses between AED 375,000 and AED 3 million in taxable income will need to file full Corporate Tax returns and may owe tax at 9% on the income above the threshold.
Free zone entities cannot elect Small Business Relief and claim QFZP (0% qualifying income) status in the same tax period. Electing SBR means the entity is treated as not having qualifying income — so QFZP benefits do not apply. For most free zone entities with qualifying income, maintaining QFZP status is more advantageous.
Marifah Tax Advisory reviews your revenue, structure, and tax period to determine whether SBR applies — and files your return correctly. We ensure you do not over-pay Corporate Tax or miss an election that could save you thousands. Contact us for a free consultation.