UAE Corporate Tax: Understanding Small Business Relief 2026
As the UAE’s Corporate Tax (CT) regime enters a pivotal phase, with the first tax periods concluding for many businesses in 2024, one critical provision stands out as a major relief for the entrepreneurial backbone of the economy: the Small Business Relief (SBR).
Introduced to support startups and small-to-medium enterprises (SMEs), this relief simplifies tax compliance processes and offers tax exemption, allowing them to focus resources on growth and stability during this foundational period of the new tax landscape.
What Is Small Business Relief?
Small Business Relief allows eligible businesses to be treated as having no taxable income for a tax period, effectively exempting them from paying corporate tax for that tax year. The relief applies to tax periods that end before or on 31 December 2026.
Who Is Eligible for Small Business Relief?
To qualify for SBR, the taxpayer must be:
- Be a “Resident Person” under the UAE Corporate Tax Law (either a natural or juridical person).
- Have revenue ≤ AED 3 million in the current and all previous tax periods (up to 31 December 2026)
- Not be part of a Multinational Enterprise Group (MNE) (i.e., consolidated global revenues ≥ AED 3.15 billion).
- Not be a Qualifying Free Zone Person (QFZP)
Why It Matters for Small Businesses
Corporate tax can affect cash flow and increase administrative complexity. SBR provides smaller businesses with essential breathing space, helping them reduce tax exposure, simplify compliance, and focus on reinvesting profits into growth.
This relief is particularly valuable for start-ups and SMEs that are still building their financial base and expanding operations within the UAE.
Key Benefits of Small Business Relief
- Zero corporate tax for eligible tax periods
- Simplified compliance
- Improved cash flow to reinvest profits effectively
- Short-term flexibility to strengthen your business before the relief period ends
Strategic Considerations Before Applying
While the relief is highly beneficial, small business owners must be aware of the trade-offs. Understanding how the relief fits into your overall tax strategy is crucial before applying.
- Once you elect to use Small Business Relief, you cannot carry forward tax losses or claim certain deductions for that period.
- Exceeding the AED 3 million revenue threshold makes your business ineligible for that and future tax periods.
- The scheme applies only until 31 December 2026, so early assessment and forward planning are essential.
A professional tax review can help determine whether electing SBR aligns with your business goals and long-term growth strategy.
How Trinity Group Can Help
At Trinity Group, we help UAE businesses navigate corporate tax with confidence and clarity.
Our team provides:
- Expert review of your financials to confirm eligibility for Small Business Relief
- Tax planning and modelling to compare outcomes with and without SBR
- Assistance with corporate tax registration, elections, and compliance
- Guidance to prepare for the post-2026 corporate tax environment
The choice to apply for Small Business Relief should be part of a wider financial strategy and Trinity Group ensures it supports your long-term success.