Small Business Relief can bring your Corporate Tax bill to zero if your revenue stays under AED 3 million — and it's now been extended through 2029. But it's an election, not an automatic exemption, and a few categories of business can't use it at all.
Not every UAE business needs to calculate taxable income the long way. Under Ministerial Decision No. 73 of 2023, a resident taxable person whose revenue does not exceed AED 3,000,000 in the relevant tax period — and in every prior tax period — can elect to be treated as having no taxable income at all for that period, which in practice means a 0% effective Corporate Tax outcome. Following Ministerial Decision No. 131 of 2025, this relief has now been extended to apply through tax periods ending on or before 31 December 2029, giving eligible small businesses several more years of simplified, low-cost compliance.
Who Can — and Can't — Elect Small Business Relief
- Available to resident taxable persons (companies and individuals in business) with revenue at or below AED 3,000,000 in the current tax period and every previous tax period
- Not available to Qualifying Free Zone Persons, even if their revenue is under the threshold — QFZP status and Small Business Relief are mutually exclusive routes to a favourable tax outcome
- Not available to members of a Multinational Enterprise Group with consolidated group revenue above the OECD Pillar Two threshold (broadly EUR 750 million / roughly AED 3.15 billion)
- Relief must be actively elected when filing the Corporate Tax return — it is not applied automatically just because revenue happens to fall under AED 3 million
Revenue, Not Profit, Is the Test
The AED 3 million threshold is measured against revenue (turnover), not net profit. A business with very thin margins but AED 3.5 million in revenue does not qualify, even if its actual taxable profit would have been small. Conversely, a highly profitable business with AED 2.5 million in revenue can elect the relief and pay no Corporate Tax at all for that period.
A boutique marketing consultancy generated AED 2.7 million in revenue in its most recent tax period, with AED 900,000 in net profit. Without Small Business Relief, 9% Corporate Tax would apply to the profit above AED 375,000 — roughly AED 47,250 due. By electing Small Business Relief on its return (since its revenue in this and all prior periods stayed under AED 3 million), the business is instead treated as having no taxable income, reducing its Corporate Tax liability to zero for that period.
Why the 2029 Extension Matters
The relief was originally scheduled to run out for tax periods ending after 31 December 2026. Ministerial Decision No. 131 of 2025 pushed that cut-off out to tax periods ending on or before 31 December 2029, meaning eligible small businesses now have a much longer runway of simplified compliance before they need to plan for full Corporate Tax computation.
Relief From Tax, Not From Registration or Filing
Electing Small Business Relief does not remove the underlying obligation to register for Corporate Tax and to file a return each period — it only affects the tax computation itself. Businesses still need to register within their FTA Decision No. 3 of 2024 deadline and file on time, or the standard AED 10,000 late-registration penalty and filing obligations still apply regardless of how little tax is ultimately owed.
How Corcess Helps
We assess whether Small Business Relief genuinely suits your structure — checking your revenue history across all prior periods, your free zone status, and whether a lower administrative burden today is worth forgoing certain deductions and loss relief that only apply under the standard computation — then make the election correctly as part of your return.