Small Business Relief in UAE Corporate Tax: Who Qualifies?
Running a small business in the UAE comes with many challenges. From staying ahead of the competition to managing day-to-day operations, your plate is always full. But now there is good news for you. The UAE has introduced a special Small Business Relief under the Corporate Tax law. This update, now active in 2025, can reduce your tax burden or even eradicate it.
Let’s look at what Small Business Relief in UAE Corporate Tax is, who can benefit from it, and what you should know before applying.
What Is Small Business Relief in UAE Corporate Tax?
Small Business Relief is a benefit given under the UAE Corporate Tax law. It is designed to support small and micro businesses. If your business qualifies, you will be treated as if you have no taxable income, even if your profits cross the general threshold of AED 375,000 but the turnover remains equal to or less than AED 3 million.
This allows smaller companies to avoid the 9 percent corporate tax rate in UAE while staying compliant with UAE law.
Who Can Apply for Small Business Relief in 2025?
Not every business is eligible for this benefit. You must meet certain conditions to qualify. Here’s a clear breakdown.
✅ Eligibility Criteria
To qualify for Small Business Relief in the UAE, you must meet all of the following conditions:
- Revenue must be AED 3 million or less for the current tax year and every past year starting from 2024.
- You must be a resident taxable person in the UAE.
- Your company must not be part of a multinational group with global revenue above AED 3.15 billion.
- You must not qualify as a Qualifying Free Zone Person (QFZP).
Note: If your revenue goes over AED 3 million in any year, you will lose the relief for that year and future years.
How long will Small Business Relief (SBR) apply?
This benefit is available for tax periods starting from 1 June 2023 to 31 December 2026. So if your business meets the rules in 2025, you can still take advantage of this opportunity.
Key Benefits for Small Businesses
Many business owners think that corporate tax in UAE will only add stress. But Small Business Relief in UAE Corporate Tax actually helps in the following ways:
💡 Major Benefits
- 0% tax on business income if you qualify.
- No need to calculate taxable income for that period.
- Reduced accounting and reporting efforts.
- Keeps you fully compliant with UAE tax law.
- Saves you money that can be reinvested in growth.
What Businesses Need to Watch Out For
While this relief is helpful, you must still follow the rules properly.
⚠️ Things to Avoid
- Claiming relief when your revenue is more than AED 3 million.
- Not maintaining proper books and records.
- Missing your Corporate Tax registration deadline.
Filing false claims can lead to corporate tax fines and penalties in UAE, so be careful and honest in your corporate tax return filings.
Documents Required to Claim Small Business Relief
If you plan to apply for Small Business Relief, keep the following ready:
📂 Documentation Checklist
- Valid Trade License
- Financial statements showing revenue under AED 3 million
- Emirates ID or passport copy of the business owner(s)
- Corporate Tax Registration Certificate
- Details of ownership and group structure (if any)
You should also file your Corporate Tax return on time, even if your tax due is zero.
How to Apply for Small Business Relief
Applying is easy if you follow the right process. Here’s how to do it:
📝 Step-by-Step Guide
- Check your revenue — Is it AED 3 million or below?
- Register for Corporate Tax with the Federal Tax Authority (FTA).
- When filing your tax return, select the option to claim Small Business Relief.
- Submit all required supporting documents.
- Keep copies of all filings and confirmations for your records.
Unique Insight: Why This Matters in Real Business Terms
Many businesses think this relief is only for “tiny startups”. That’s not true. Even a growing firm with multiple trade licenses or part-time income might qualify, as long as total revenue is under the AED 3 million mark.
Example: A consultancy firm with two consultants and yearly revenue of AED 2.7 million still qualifies. They can reinvest their tax savings into marketing, hiring, or product upgrades, without worrying about penalties.
This relief is not just about saving tax. It’s about giving smaller businesses a fair chance to grow in a competitive market.
Don’t Miss Out on Small Business Relief
The Small Business Relief in UAE Corporate Tax is a golden chance to cut costs legally. If your business earns under AED 3 million, this can make a huge difference.
Get Help from Tax Experts at Xact Auditing
Understanding tax rules can be tricky. At Xact Auditing, we help businesses:
- Check their eligibility for Small Business Relief
- File accurate tax returns on time
- Avoid penalties and hidden risks
- Set up a strong compliance strategy
Let us take the stress off your shoulders. We’ll handle the numbers while you focus on your business. Our firm offers a full range of corporate tax services in the UAE.
Previous Post
Next Post