The headline
Eligible businesses pay 0% instead of 9% on their taxable income, for tax periods ending on or before 31 December 2026.
0% tax, legally
If your business revenue is AED 3 million or less, you may be able to pay 0% corporate tax through 2026 — but only if you meet every condition and elect the relief on your return. Here's the eligibility test, the fine print, and what the election is actually worth in dirhams.
What it is
Small Business Relief lets eligible resident businesses pay 0% corporate tax instead of 9%. It is not an exemption from registration or filing — it's a different tax outcome on the return you were filing anyway.
Eligible businesses pay 0% instead of 9% on their taxable income, for tax periods ending on or before 31 December 2026.
Revenue of AED 3 million or below — in the current tax period and in every previous tax period. One year over the line and you're out.
The relief is elected on the return — it is not automatic. Nobody at the FTA applies it for you, and there's no refund for an election you forgot to make.
We prepare workings, schedules and compliance-ready records. For regulated representation before the FTA we work with registered UAE tax partners.
The eligibility test
Every box must be ticked. Miss one and the relief isn't available to you:
The revenue test is on gross revenue, not profit. A consultancy with AED 2.8 million in revenue and AED 400,000 in profit passes; one with AED 3.2 million in revenue and a loss doesn't.
The fine print
The AED 3 million test looks backwards, not just at this year. If revenue was AED 3.4 million two years ago and AED 2 million now, you don't qualify this year. Growth past the line is a one-way door — plan for it.
Elect SBR for a period and you forfeit carrying forward any loss from that period. In a loss year, the election can cost more than it saves — run the numbers both ways.
The relief covers tax periods ending on or before 31 December 2026. Don't build a five-year pricing model on a 0% rate — confirm the treatment of later periods on EmaraTax or with a registered tax partner.
Worked example
Take a Sharjah trading LLC with AED 2.2 million revenue and AED 480,000 taxable income — eligible on every count.
| Scenario | Computation | Tax (AED) |
|---|---|---|
| Without SBR | (480,000 − 375,000) × 9% | 9,450 |
| With SBR elected | 0% on full taxable income | 0 |
| Saving from one election | 9,450 | |
AED 9,450 saved by one checkbox on the return — if you knew to tick it and your workings prove eligibility. Now the trade-off: suppose the same company has a bad year with a AED 150,000 tax loss. Electing SBR that year means the AED 150,000 loss cannot be carried forward to shelter next year's profit. At 9%, that lost shelter is worth up to AED 13,500 of future tax. In a loss year, sometimes the right move is to not elect — pay nothing either way (there's no profit to tax), and keep the loss alive for a profitable year. This is a calculation, not a reflex.
Avoid these
The single most expensive mistake. The FTA doesn't apply relief you didn't elect, and there's no mechanism to reclaim it after the return is filed.
A single exceptional year above the line disqualifies future periods. If you're approaching the ceiling, model the tax cost of crossing it before you sign that big contract.
Relief or not, you register and file every year. "I qualified for 0% so I didn't file" is how a AED 500/month late-filing penalty starts.
The forfeited loss carry-forward can be worth more than the relief. Always compare: SBR now vs. sheltered profit later.
Different regimes, different conditions. QFZPs can't claim SBR — and mainland companies can't claim QFZP treatment. See our free zone guide.
Eligibility claimed without revenue workings is just a hope. Keep the revenue computation with your return papers for the full 7-year record period.
How to claim it
Not sure you pass the test? That's a 20-minute review of your revenue history — we do it free as part of a Finance Review.
Check my SBR eligibility
FAQs
No. You must elect it on your corporate tax return for each period you claim it. The FTA will not apply it on your behalf, and you can’t reclaim it after filing if you forgot the election. Keep workings that prove you passed the revenue test.
No. The AED 3 million test applies to the current period and all previous periods. A single year above the line disqualifies you going forward, even if revenue has since fallen back below it.
No. Qualifying Free Zone Persons are excluded from SBR — they have their own 0% regime for qualifying income. See our free zone guide for how that works.
Yes. Relief changes your tax bill, not your obligations. You still register, keep 7 years of records, and file every year. Late filing penalties apply to SBR claimants exactly the same as everyone else.
Not for the same period. Electing Small Business Relief for a tax period means you forfeit the loss carry-forward for that period. In a loss year, compare the value of the relief against the future tax the carried-forward loss would shelter.
The relief is available for tax periods ending on or before 31 December 2026. The treatment of later periods isn’t something to assume — confirm it on EmaraTax or with a registered tax partner before you build it into long-term plans.
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