Small Business Relief Under UAE Corporate Tax: A Complete Guide for SMEs
Corporate tax in the UAE has brought new compliance requirements for the businesses across the UAE. Since the implementation of Corporate tax, it is mandatory all the business to register for corporate tax. Businesses having taxable income more than AED 375,000 are subject to 9% corporate tax. At the same time, to support startups, SMEs and entrepreneurs, the UAE Ministry of Finance introduced Small Business Relief (SBR) under the UAE Corporate Tax Law.
What Is Small Business Relief Under UAE Corporate Tax?
A Small Business Relief (SBR) is a tax concession provided by the UAE Ministry of Finance under the UAE Corporate Tax Law which provide relief to eligible small businesses to be treated as having no taxable income for a specific tax period.
What to expect if a business qualifies and elects for Small Business Relief:
- The corporate tax payable becomes 0%
- No corporate tax is charged
- While filing the corporate tax returns the compliance obligations are simplified
This initiative aims to support SMEs, startups, freelancers, and growing businesses in the UAE.
Who Can Avail Small Business Relief in UAE?
A business may avail Small Business Relief under UAE Corporate Tax if it meets the eligibility criteria prescribed by the Federal Tax Authority (FTA).
The FTA has provided clear guidelines for the businesses who can qualify for small business relief under UAE corporate tax.
Eligibility Criteria for Small Business Relief
To qualify, the business must meet all of the following conditions:
- The business is a UAE resident taxable person
- Annual revenue does not exceed AED 3 million
- The relief is elected for the relevant tax period
- The business is not:
- A Qualifying Free Zone Person
- A member of a multinational enterprise group
- Engaged in excluded activities as per UAE CT law
- The AED 3 million revenue threshold applies per tax period and is valid until 31 December 2026 (subject to law amendments).
What Are the Requirements to Qualify for Small Business Relief?
To successfully claim Small Business Relief under UAE Corporate Tax Law, businesses must ensure the following:
Key Requirements
- Mandatory Corporate Tax Registration with FTA
- Well maintained accounting records
- The business must elect ‘Small Business Relief’ while filing the corporate tax return
- Revenue should be calculated as per the UAE Corporate tax accounting standards
- The business should avoid splitting its operations to bypass reporting or tax thresholds.
Failure to meet these requirements may lead to disqualification and penalties.
Documents Required to File Corporate Tax Return Under Small Business Relief
As it is mandatory for all the businesses to register for Corporate tax in UAE. It is also compulsory to file corporate tax return on time even if the tax payable is Zero. The following documents are typically required:
Required Documents Checklist
- Trade License copy
- Corporate Tax Registration Certificate
- Financial Statements (Income Statement & Balance Sheet)
- Revenue breakdown for the tax period
- Bank statements
- General ledger or trial balance
- Owner/Shareholder details
- Confirmation of Small Business Relief election
It is mandatory for all businesses in UAE To maintain proper financial records, as the FTA my request additional documents for audit or review purposes.
Benefits of Small Business Relief for SMEs in UAE
- 0% Corporate Tax liability
- Reduced compliance burden
- Encourages business growth and reinvestment
- Supports startups and entrepreneurs
- Simplified tax planning for SMEs
Common Mistakes to Avoid While Claiming Small Business Relief
- Missing Corporate tax registration deadlines
- In accurate Revenue calculation
- Failing to elect Small Business Relief in the return
- Incomplete records or error in bookkeeping
- Assuming Corporate tax return filing is not required due to 0% tax
Alpha Auditing offers Professional guidance helps avoid penalties and disqualification.
File Your Corporate Tax Return with Alpha Auditing – Starting from AED 999*
Understanding the UAE corporate tax regulations might be difficult for businesses but extremely critical to comply with UAE tax laws. To avail a small business relief, one must understand the requirements and should be eligible. Alpha Auditing offers expert corporate tax return filing services for SMEs and startups.
Why Choose Alpha Auditing?
- FTA-compliant corporate tax filing
- Small Business Relief eligibility assessment
- Accurate financial review & documentation
- Affordable pricing with transparent fees
- Experienced corporate tax consultants in Dubai
*The offer may vary depending on the case, and pricing is subject to change.
