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Small Business Relief: How to Pay 0% Corporate Tax Before the 2026 Deadline

10 August 2026 · 5 min read · Nuvaris Advisory Team

Small Business Relief lets an eligible UAE resident business elect to be treated as having zero taxable income — meaning 0% Corporate Tax — for tax periods ending on or before 31 December 2026. For businesses under the AED 3 million revenue threshold, it's currently the single most valuable Corporate Tax concession available, and it isn't automatic: you have to elect it, and the window is closing.

Who qualifies
Revenue of AED 3 million or less in the current tax period and every previous tax period since 1 June 2023 — one period above the threshold permanently disqualifies you, even in later years
A UAE resident person — either a juridical entity incorporated in the UAE, or a natural person conducting business here
Not a member of a Multinational Enterprise Group with global consolidated revenue above AED 3.15 billion
Not a Qualifying Free Zone Person electing the 0% QFZP regime — the two reliefs are mutually exclusive
The permanent disqualification trap

This is the detail that catches businesses off guard most often. The AED 3 million cap isn't just about the current year — it applies cumulatively. If your revenue was AED 2.8 million in 2024, AED 2.9 million in 2025, and then AED 3.1 million in 2026, you don't just lose eligibility for 2026 — you lose it permanently, for every future year, even if revenue later drops back below AED 3 million. Track your rolling revenue carefully if you're anywhere near the line.

What you give up by electing it

Small Business Relief isn't free. Electing it means you're treated as having no taxable income for that period, which also means you can't carry forward tax losses or disallowed interest expenditure from that period, and transfer pricing documentation requirements are relaxed but the arm's-length principle still applies. For a business with meaningful interest expense or existing losses to use, running the numbers both ways before electing is worth the exercise — the relief isn't automatically the better outcome for every business under the threshold.

How to elect it
Register for Corporate Tax and obtain a TRN — this is required regardless of whether you plan to elect SBR
File your Corporate Tax return via EmaraTax by the standard deadline (nine months after your financial year-end)
Tick the Small Business Relief election within the return itself — there's no separate advance application
Re-elect every period — qualifying once doesn't carry the election forward automatically
The 2026 deadline

As currently legislated, Small Business Relief is only available for tax periods ending on or before 31 December 2026. For a calendar year-end business, that means financial year 2026 is the last period this relief applies to under the current rules — from 2027, all businesses revert to the standard 0%/9% Corporate Tax structure regardless of revenue size, unless the Ministry of Finance announces an extension.

Worth checking now: if you're a free zone entity that hasn't yet qualified as a QFZP, you may still be eligible for Small Business Relief instead — it's often the simpler path through the rest of 2026 for smaller free zone businesses without complex qualifying income structures.

This article is for general information and reflects our understanding of FTA guidance at the time of writing. It isn't tax or legal advice — always confirm how these rules apply to your specific situation before acting.

Under AED 3 million in revenue?

We'll check your eligibility, run the numbers against the standard regime, and handle the election in your Corporate Tax return.

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