Since 2023 the UAE has charged a 9% corporate tax, yet small companies have a fully legal route to a 0% bill: Small Business Relief (SBR). If your revenue stays under the set threshold, your business can be officially treated as having no taxable income, pay no corporate tax at all, and keep its books under a lighter, simplified regime. For founders and small operators anywhere in the world who run a UAE company, that is one of the most valuable tools in the current tax framework.
Important: This is not a grey-area workaround. Small Business Relief is written into law by Ministerial Decision No. 73 of 2023. Below we explain what SBR is, how it differs from the standard AED 375,000 threshold, which conditions you have to meet, who is shut out of the relief, how long it runs, and how to claim it correctly so you avoid penalties.
What Is Small Business Relief
Small Business Relief is a UAE corporate tax relief for resident companies and individual entrepreneurs with modest revenue. The idea is simple: if a business elects the relief and meets the conditions, it is treated as having no taxable income for that period. The corporate tax due is therefore 0%, no matter how large the profit inside that revenue cap.
There is a second benefit that matters just as much: simplified compliance. Businesses on SBR are not required to calculate their taxable base in detail, may account on a cash basis, and file a simplified corporate tax return. For start-ups and micro-businesses, that saves real money and real time on accounting.
How SBR Differs From the AED 375,000 Threshold
This is where people get confused. Under the standard rules, corporate tax is 0% on profit up to AED 375,000 and 9% on anything above that. Small Business Relief works differently: it looks at revenue, not profit, and once you are inside the revenue cap it zeroes the tax on all of your income, even if your profit runs well past AED 375,000.
Table 1 — Example: with SBR and without
| Scenario | Without SBR | With Small Business Relief |
|---|---|---|
| Revenue AED 2.5M, profit AED 500,000 | 9% on the amount above AED 375,000 (≈ AED 11,250) | 0% (nil taxable income) |
In short, SBR is the better deal for a profitable small business: it removes the tax entirely rather than sheltering only the first slice of profit, and it simplifies your reporting on top of that, which the standard threshold does not.
Conditions and the Revenue Threshold
The key condition is the size of your revenue. The relief is open to a resident person (a company or an individual carrying on business) whose revenue does not exceed AED 3,000,000 in the current tax period and in every previous one. The moment revenue crosses that line even once, the relief is lost for all future periods.
Table 2 — Small Business Relief at a glance
| Item | Detail |
|---|---|
| Legal basis | Ministerial Decision No. 73 of 2023 |
| Revenue threshold | Up to AED 3,000,000 per period (and in all prior periods) |
| Effect | Nil taxable income → 0% corporate tax |
| Availability | Tax periods ending on or before 31 December 2029 (extended from 2026) |
| How to obtain | FTA registration + election in the tax return |
| Not available to | QFZPs (free zone 0% regime) and members of MNE Groups |
Revenue is measured under the applicable accounting standards (IFRS). Clean bookkeeping is not a formality here: it is exactly what proves your right to the relief if the authority asks.
Who Cannot Claim Small Business Relief
Low revenue alone does not guarantee access. SBR is not available to:
- Qualifying Free Zone Person (QFZP) — free zone companies that already enjoy a 0% rate on qualifying income. You cannot combine the two regimes.
- Members of Multinational Enterprise (MNE) Groups — group structures with consolidated revenue of at least EUR 750 million that fall under the Pillar Two rules.
Keep the anti-abuse rule in mind too: if you artificially split one business into several companies to keep each below the threshold, the Federal Tax Authority can treat that as an arrangement to avoid tax and deny the relief.
How Long the Relief Lasts
Small Business Relief was originally available for tax periods ending on or before 31 December 2026. It has since been extended, and now applies to periods ending on or before 31 December 2029, with the AED 3,000,000 revenue threshold left unchanged. That gives small businesses several more years of 0% corporate tax, but the relief is still temporary, so it is worth structuring your business with its end date in view.
How to Claim Small Business Relief
The relief is not applied automatically — you have to elect it. The steps are:
- Register with the FTA. Every company must register for corporate tax, even one that ends up paying 0%.
- Check eligibility. Confirm that revenue in the current and all prior periods stays at or below AED 3,000,000 and that you are not a QFZP or part of an MNE Group.
- Make the election. SBR is claimed in the corporate tax return through the EmaraTax portal for the relevant period.
- Keep records. Even under the simplified regime you must maintain accounts and keep the documents that support your revenue figure.
Missing the registration or making mistakes in the return leads to penalties, so it is worth having the election handled by specialists.
Points to Remember: Nuances and Limits
For all its upside, SBR comes with trade-offs. In periods when you use the relief you cannot carry forward tax losses or unused net interest deductions to later periods — something a fast-growing business that will soon outgrow the cap needs to plan around. And once revenue passes AED 3 million, the company moves to the standard regime and pays 9% on profit above AED 375,000. SBR is an excellent tool at the early stage, but you have to switch off it at the right moment as you scale.
How We Help
Dynasty Business Adviser helps small businesses in the UAE use Small Business Relief the right way: we test your eligibility, register the company with the FTA, make the SBR election correctly in your return through EmaraTax, keep your simplified accounts, and flag in advance when it is time to move to the standard regime. That way you pay 0% where the law allows it and avoid penalties for reporting errors.
Want to Pay 0% Corporate Tax, Legally?
Small Business Relief is a legitimate way for small businesses in the UAE to avoid corporate tax through 2029 — provided the relief is claimed correctly and your books are in order. To confirm your eligibility and elect SBR without mistakes, talk to specialists. Contact Dynasty Business Adviser: we will assess your situation, register your company with the FTA, and handle the relief end to end.
Get a consultation: ☎️ +971 52 634 1022 · info@dynasty-uae.com
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Disclaimer: this material is for information only and is not tax advice. The conditions, thresholds and deadlines of Small Business Relief may change. Confirm the current requirements in a personal consultation and through official sources (the FTA and the UAE Ministry of Finance).
