Guide
UAE Small Business Relief: the AED 3 million revenue test
Updated
The relief is generous and easy to lose. It turns on revenue, not profit, must be elected, and is switched off permanently once the threshold is breached in any period.
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How this calculator works
- Article 3 of the Corporate Tax Law imposes corporate tax at 0% on the portion of taxable income not exceeding the amount set by Cabinet decision. It imposes 9% on taxable income above it (Federal Decree-Law No. 47 of 2022).
- That amount is AED 375,000, fixed by Cabinet Decision No. 116 of 2022, and it applies once per taxable person for the tax period whether or not the person carries on several businesses (Ministry of Finance). Splitting a business artificially to multiply the threshold is treated as a corporate tax advantage under the general anti-abuse rule.
- Small Business Relief treats an eligible resident person as having derived no taxable income. It applies where revenue is AED 3,000,000 or less in the relevant tax period and in every previous tax period.
- It must be elected in the tax return. A Qualifying Free Zone Person, or a member of a multinational group with consolidated revenue above AED 3.15 billion, cannot elect it (Federal Tax Authority).
- Small Business Relief has an end date. The Ministry of Finance states that the AED 3 million revenue threshold applies to tax periods starting on or after 1 June 2023. It says the threshold will only continue to apply to subsequent tax periods that end before or on 31 December 2026 (Ministry of Finance).
- Check the position for any tax period ending after that date before relying on the relief.
- For a Qualifying Free Zone Person, Article 3(2) charges 0% on Qualifying Income and 9% on taxable income that is not Qualifying Income. The AED 375,000 threshold sits in Article 3(1) and is not repeated in Article 3(2), so the calculator applies no 0% band to a free zone person's non-qualifying income.
- Where Small Business Relief is elected, other exemptions, reliefs and deductions are not available for that tax period, and losses and disallowed net interest expenditure are affected. The calculator shows tax of nil and does not model those consequences.
- Large multinational groups face a separate charge: the UAE domestic minimum top-up tax, using a minimum rate of 15% (Ministry of Finance, Cabinet Decision No. 142 of 2024). This calculator does not model it.
- The top-up tax applies to members of groups with annual global revenues of EUR 750 million or more in at least two of the four preceding financial years. It covers financial years starting on or after 1 January 2025.
- The calculator starts from taxable income you supply. Arriving at taxable income from accounting profit is the hard part of a UAE corporate tax computation and involves exempt income, interest limitation, transfer pricing and other adjustments.
What the relief does
The Federal Tax Authority describes it plainly: an eligible person is treated as not having derived any taxable income in the tax period. It is not a lower rate, it is a deemed nil.
In August 2026 the Authority confirmed the relief applies where revenue is AED 3 million or less for the relevant and all previous tax periods (Federal Tax Authority).
The conditions
- Resident person
- Natural persons and juridical persons alike, provided they are resident for corporate tax purposes.
- Revenue at or under AED 3,000,000
- In the current tax period and in every previous tax period. Exceed it once and the relief is gone for good.
- Elected each tax period
- The election is made in the corporate tax return. The relief does not apply automatically.
Who cannot elect it
- A Qualifying Free Zone Person.
- A member of a multinational group with consolidated group revenue of more than AED 3.15 billion.
- Anyone whose revenue exceeded AED 3 million in any earlier tax period, even if current revenue is well below it.
You still have to register and file
The Authority has been explicit that electing the relief does not remove the obligation to register for corporate tax, submit a return and keep records. Businesses electing it file a simplified return, which reduces the information required rather than removing the filing. Returns and payment are due within nine months of the end of the tax period.
The end date
The Ministry of Finance stated, when the decision was issued, that the AED 3 million revenue threshold applies to tax periods starting on or after 1 June 2023. It said the threshold will only continue to apply to subsequent tax periods that end before or on 31 December 2026.
Nothing on the Authority's Small Business Relief page as at our updated date announces an extension. So treat any tax period ending after that date as outside the relief until an official source says otherwise.
Artificially separating a business to keep each part under AED 3 million is treated as an arrangement to obtain a corporate tax advantage under the general anti-abuse rule.