Small Business Relief for Corporate Tax, UAE

What is Small Business Relief?

Small Business Relief is a measure to help small businesses in the UAE manage the Corporate Tax system more easily. It reduces the compliance burden by simplifying tax obligations for eligible businesses.

Key Points:
 - Eligibility : Any Resident Taxable Person (individual or company) with revenue of AED 3,000,000 or less in the relevant and all previous Tax Periods ending on or before 31 December 2026.

Benefits:

  • Administrative Relief: Eligible businesses don’t need to calculate their Taxable Income and can file simplified tax returns. They can also use cash basis accounting for their Financial Statements.
  • Tax Relief: No Corporate Tax is required to be paid on income earned during the Tax Period.

    This relief aims to make it easier for small businesses to comply with tax regulations during the early stages of the Corporate Tax regime.
Small Business Relief - Corporate Tax, UAE

What benefits and Compliance Requirements apply to businesses electing for Small Business Relief?

Businesses that elect for Small Business Relief in the UAE benefit from simplified tax obligations and reduced compliance burdens.

This relief allows eligible businesses to avoid calculating Taxable Income and filing full Tax Returns, among other administrative advantages.

However, they must still meet certain compliance requirements, as outlined in the following table:
Overview of the Small Business Relief - Corporate Tax, UAE

How is Revenue determined?

To elect for Small Business Relief, an eligible Taxable Person’s Revenue must be below or equal to AED 3,000,000 for the relevant Tax Period and all previous Tax Periods.

If Revenue exceeds AED 3,000,000 in any Tax Period, the Taxable Person can no longer elect for the relief, even if Revenue falls below AED 3,000,000 in subsequent periods.

Revenue is defined as the gross amount of income derived during a Tax Period (for Corporate tax, UAE) and must be determined according to the applicable accounting standards accepted in the UAE. This includes income from sales and other gross income received, differing from profit which considers costs. Revenue should be based on the arm’s length principle, considering income from all Business Activities undertaken by the person.

Revenue for Small Business Relief - Corporate Tax, UAE

Who is not eligible for Small Business Relief?

  1.  Members of a Multinational Enterprise Group (MNE):

            - Businesses in an MNE operating in multiple countries with total revenue over AED 3.15 billion are ineligible.
            - An MNE constituent company includes any business unit in the MNE's consolidated financial statements.

  2. Qualifying Free Zone Persons:
            - Businesses designated as Qualifying Free Zone Persons are also ineligible for Small Business Relief.

Key takeaways: 

 - Eligibility Criteria : Small Business Relief is available for businesses with revenue of AED 3,000,000 or less until 31 Dec'26.

 - Administrative and Tax Relief :  Eligible businesses are exempt from calculating taxable income and can file simplified tax returns, alleviating compliance burdens.

 - Compliance Requirements :  Businesses must meet specific criteria, and members of MNEs or Qualifying Free Zone Persons are not eligible for this relief.


Fastlane: Your Corporate Tax Partner : Fastlane provides expert guidance to ensure your business meets the eligibility criteria for Small Business Relief, assists in streamlined tax filing, and offers comprehensive compliance support to help you navigate the Corporate Tax system in the UAE.
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