UAE Corporate Tax (CT) Small Business Relief allows small UAE businesses with revenue under AED 3 million to elect to pay 0% CT and benefit from simplified compliance. Here is a complete guide.
What Is UAE CT Small Business Relief?
Small Business Relief is an optional election under UAE CT (Federal Decree-Law No. 47 of 2022, Article 21). Businesses that elect for Small Business Relief: treat their taxable income as 0 AED (pay no CT), are exempt from most CT compliance requirements (no detailed tax return, no transfer pricing documentation), but still must register with the FTA and file a simplified return confirming the election. Eligibility: UAE taxable persons with revenue of AED 3,000,000 or less in the current and all prior tax periods (from June 2023 onward). Not eligible: members of multinational enterprise (MNE) groups, and qualifying free zone persons (they have their own regime).
How to Elect for Small Business Relief
Step 1: Register for UAE CT with the FTA (all businesses must register regardless). Step 2: In the CT return, elect for Small Business Relief (the election option appears in the EmaraTax return). Step 3: The CT return is simplified — just confirm the election and report revenue. No detailed income statement required. Annual election: you elect for Small Business Relief each tax year independently. If your revenue exceeds AED 3M in a future year, you cannot elect for that year.
When NOT to Elect for Small Business Relief
Even if eligible, you may NOT want to elect if: you have losses that you want to carry forward (Small Business Relief prevents loss carry-forward for elected years), you want to benefit from group loss relief or transfers (not available under SBR), or your country of residence requires proof of UAE tax filing to establish UAE tax residency (a simplified SBR return may not satisfy foreign tax authority requirements for the UAE tax domicile certificate).