Since the UAE introduced Corporate Tax, many small business owners and solo founders have been asking:
“Do I really have to pay tax if I barely make AED 1 million a year?”
The good news is: Not necessarily.
To support startups, SMEs, and micro-businesses, the UAE introduced a special provision called Small Business Relief (SBR) — explained under Ministerial Decision No. (73) of 2023.
Here’s what you need to know — simplified.
What Is Small Business Relief?
Small Business Relief is a tax exemption designed for resident taxable persons in the UAE whose revenue does not exceed AED 3 million in a financial year.
If you qualify and elect for this relief, you’ll be treated as if you have no taxable income, which means:
- No corporate tax payable
- No tax calculations required
- Simpler compliance (but you still need to file a return)
Who Can Apply for Small Business Relief?
To be eligible for SBR, you must meet all the following conditions:
- You are a resident person (UAE company or individual conducting business in the UAE).
- Your revenue is AED 3 million or less for the relevant tax period and all previous periods starting from 1 June 2023.
- You are not part of a multinational enterprise group (MNE) with global revenues over AED 3.15 billion.
- You are not a Qualifying Free Zone Person.
If you meet the criteria, you can elect to apply SBR when filing your tax return on the FTA portal.
Important: It’s Not Automatic
Small Business Relief is optional, not automatic. You must:
- Keep proper records
- File your return
- Make an active election on the FTA portal each year when filing
Also, if your revenue exceeds AED 3 million in any tax period — the relief is no longer available starting that year and in the future.
Until When Is Small Business Relief Available?
This relief is available until the end of the tax period that ends on or before 31 December 2026.
So, if your first tax period is in 2025, you can benefit from the relief until 2026 — even if it’s your first year.
Example
Let’s say your company was incorporated in October 2024, and your first tax period is 1 January 2025 to 31 December 2025.
If your total revenue in 2025 is below AED 3 million, and you meet all the conditions, you can elect for SBR when submitting your return in 2026.
Finzoryx Tip
Small Business Relief is a fantastic opportunity, but only if you structure and record your finances properly. Even if no tax is due, your books, bank records, and invoices must still be in order. At Finzoryx, we help startups and small businesses stay compliant and make the right elections — before it's too late.
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