Introduction
Did you know that many UAE businesses qualify to pay zero corporate tax — even if they’re profitable? The UAE government introduced Small Business Relief specifically to reduce the tax burden on startups and SMEs. Here’s how it works and how to claim it.
What Is Small Business Relief?
Small Business Relief (SBR) is a provision under the UAE Corporate Tax Law that allows eligible businesses to elect to be treated as having zero taxable income for a given tax period. In simple terms: no taxable income means no corporate tax.
This is a significant relief for small businesses, especially those just starting out or operating with modest revenues.
Who Qualifies for Small Business Relief?
To qualify for Small Business Relief in 2026, your business must:
• Be a UAE resident legal entity, mainland or qualifying free zone person
• Have revenue of AED 3,000,000 or less in the relevant tax period
• Have had revenue of AED 3,000,000 or less in all prior tax periods since June 2023
If your revenue exceeds AED 3,000,000 in any single period, you’re no longer eligible for that period.
What Counts as Revenue?
Revenue includes all income derived from your business activities: sales, fees, commissions, rental income from business properties, and any other ordinary income. Speak to a tax advisor for clarity on your specific situation.
How to Claim Small Business Relief
Small Business Relief is not automatic. You must:
- Register for corporate tax with the FTA, mandatory for all businesses
- File your corporate tax return on time
- Elect for Small Business Relief on your return for the qualifying period
The election is made each tax year. Even if you qualified last year, you must confirm your eligibility again for each new tax period.
What You Still Have to Do
Claiming SBR doesn’t mean you can ignore your tax obligations. You still must:
• Register for corporate tax
• File an annual corporate tax return
• Maintain proper accounting records
• File VAT returns if you’re VAT-registered
What Happens When You Grow Past AED 3M?
The moment your revenue exceeds AED 3,000,000, you’re no longer eligible for Small Business Relief for that tax period. You’ll need to calculate and pay 9% corporate tax on profits above AED 375,000. This makes it all the more important to track your revenue accurately throughout the year.
How OPAB Can Help
Determining SBR eligibility, filing correctly, and maintaining the records to support your claim is exactly what OPAB does for hundreds of UAE businesses. We’ll register you, file your returns, and make sure you’re claiming every relief you’re entitled to.
Ready to simplify your finances? Contact OPAB — Outsource Prime Accountants and Bookkeepers for a free consultation. Our team of UAE-based accounting experts is here to help your business stay compliant and grow with confidence.
