Plan · Small Business Relief
A business whose revenue is AED 3 million or less, and always has been, can be treated as having no taxable income for tax periods ending on or before 31 December 2029. We confirm eligibility, test whether electing saves anything once losses are counted, and file the simplified return.
Plan
What we do
We test revenue for the current tax period and every earlier one, measured under accounting standards, and confirm the business is not excluded as a Qualifying Free Zone Person (QFZP) or as a member of a multinational group with revenue of AED 3.15 billion or more.
We compare the tax with and without relief, including the value of any losses, net interest or R&D tax credit that would be given up, before the election is made in the return.
Relief is elected one tax period at a time. We plan the years ahead, including the year revenue is likely to pass AED 3 million and how losses from years without relief can still be used.
Where a business operates through more than one company or licence, we check that each has a genuine commercial basis, because splitting a business to stay under the limit is treated as abusive.
Electing relief does not switch off the arm's length rule, so dealings with related parties must still be at the price independent parties would agree. We check that they are.
We prepare and file the simplified return on EmaraTax, the FTA's online portal, and set up the records that must be kept for seven years.
How it works
Day 1
At no charge, you send revenue for each tax period so far and we confirm whether relief can be elected.
Typically 1 week
We model the tax both ways, including any losses or interest that would be forfeited.
Before filing
You decide with the numbers in front of you. The election is made in the return for that period.
Typically 1 to 2 weeks
We prepare the return and file it on EmaraTax as your registered tax agent.
Annually
Before each year end, we test revenue against AED 3 million again and review the case for electing.
What you get
Know the law
Small Business Relief can be elected for tax periods ending on or before 31 December 2029.
Ministerial Decision No. 73 of 2023, Art. 2(2), as replaced by Ministerial Decision No. 131 of 2026
Revenue must be AED 3 million or less in the tax period and in every previous tax period; exceeding it once ends eligibility permanently.
Ministerial Decision No. 73 of 2023, Art. 2
Only resident persons can elect, and Qualifying Free Zone Persons and members of multinational groups with consolidated revenue of AED 3.15 billion or more are excluded.
Federal Decree-Law No. 47 of 2022, Art. 21; Ministerial Decision No. 73 of 2023, Art. 3
An electing business is treated as having no taxable income, but must still register, file a return and keep records.
Federal Decree-Law No. 47 of 2022, Art. 21
Tax losses and net interest expenditure incurred in a relief year cannot be carried forward.
Ministerial Decision No. 73 of 2023, Arts. 4 and 5
Artificially separating a business to stay under AED 3 million is treated as an abusive arrangement.
Ministerial Decision No. 73 of 2023, Art. 6; Federal Decree-Law No. 47 of 2022, Art. 50
Yes. Ministerial Decision No. 131 of 2026, issued on 29 July 2026 and announced by the Ministry of Finance on 7 August 2026, extends relief to tax periods ending on or before 31 December 2029. Before that, the last eligible periods were those ending on 31 December 2026. The AED 3 million limit and the other conditions have not changed.
Revenue, measured under the accounting standards the business reports under, not profit. A business with AED 3.2 million of revenue and thin margins cannot elect, while one with AED 2.9 million of revenue and high profits can. For the second business, relief can be worth a great deal: on AED 900,000 of taxable income, it removes a corporate tax bill of AED 47,250.
No. The test covers the current tax period and every previous one, so a single period above AED 3 million ends eligibility permanently. Some published summaries suggest that only earlier periods ending by 31 December 2026 count, but the Ministerial Decision does not say that.
Often not. In a loss year there is no tax to save, and a loss made in a year relief is elected cannot be carried forward. Without relief, the loss carries forward indefinitely and can later offset up to 75% of taxable income. Whether that is worth more than the simpler return depends on expected profits, which is what we model.
Yes. The business must be registered, file a simplified return within nine months of the end of each tax period and keep its records. The FTA restated this in August and September 2026. A late return attracts the same penalties as any other: AED 500 a month or part month for the first 12 months, then AED 1,000 a month.
Non-resident persons, Qualifying Free Zone Persons and members of multinational groups with consolidated revenue of AED 3.15 billion or more. Resident companies, free zone companies that are not QFZPs and resident individuals in business can elect if they pass the revenue test. The AED 1 million figure quoted in some news reports is the turnover test for individuals and does not apply to companies.
Each company is a separate taxable person with its own revenue test. Splitting one business across companies or licences to stay under AED 3 million, however, is treated as an abusive arrangement under the general anti-abuse rule. If the companies genuinely run different businesses for commercial reasons, the position is different, and we review the facts before any election is made.
Yes. The arm's length rule still applies to dealings with related parties. The FTA's Small Business Relief guidance does not require a Master File or Local File from electing businesses, but related-party prices should still be at market value and supportable.
Often needed together
Talk to us
Send us revenue for each tax period so far and the expected result for this year. We will confirm whether relief can be elected, and whether it should be. The first conversation is free.
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