The UAE Federal Tax Authority (FTA) has published a complete guide to minor Business Relief (CTGSBR1), an initiative designed to simplify implementing the corporate tax system to qualifying companies. This guide focuses on the essential aspects of the relief, which allows small businesses to navigate the initial phases of the tax system without difficulty. 

According to companies who have been surveyed, they are often faced with difficulties when the latest tax guide is released from the Federal Tax Authority. The reason for this is that experts from tax professionals help businesses understand the tax reforms that are coming out. 

  

• Guides are often lengthy or complex. 
• They can be a hassle and time-consuming. 
• Modifications or additions to regulations in place. 
• It could cause confusion and mistakes in interpretation. 

 

 This guide provides the main topics listed below: 

  

• Introduction of Small Business Relief 
• Eligibility requirements 
• How does it work? 
• How long is it available? 
• Similar compliance requirements 

 

  

The Benefits of HTML0 for Small Business Assistance: 

The burden of compliance is reduced. Smaller businesses can avoid the tedious task of calculating tax-deductible income and filing complete tax returns. This lets them concentrate on their growth and operations. 

• Tax-Free Period: Up to December 31, 2026, businesses with annual revenues less than AED 3 million can energetically run their operations tax-free. This means substantial savings in financial costs and less stress. 
• Simplified record-keeping: Businesses can adopt cash-based accounting, simplifying managing their money.  

Eligibility Requirements 

Resident Taxable Person both legal individuals (companies) and natural individuals (individuals) are eligible for tax exemption if they’re UAE residents for tax purposes related to corporations. 

• Revenue Threshold company must have an annual revenue of AED three million or less during the tax period in question and all preceding periods. 
• A UAE-wide Small Business Relief initiative signifies an unwavering commitment to the growth and development of small-scale businesses. If you know the rules and eligibility requirements, entrepreneurs and new companies can use the tax benefits to benefit them and flourish in the current corporate tax system. 
• The exceptions are Multinational Enterprise Groups (MNEs). Companies which are members of MNEs are not qualified to receive Small Business Relief. 

  

Eligibility requirements for small-business assistance  

 

Qualifying Free Zone Persons 

Businesses already benefited from a tax rate of 0% for corporate income for income qualifying within free zones aren’t qualified. The guideline states that “Any Taxable Person who is eligible (being Resident Taxable or Juridical Person or Natural Person) that has Revenue less than or at least AED 3,000,000 within the Tax Period in question which ends before December 31, 2026, may choose to be considered to have no taxable income during that time. They are not required to determine their Taxable Income or file full Tax Returns. 

To apply for slight relief for business, the person must be a resident in the Corporate Tax purpose if their income is lower than or equivalent to AED 3,000,000 during the relevant Tax Period and any prior Tax Periods. 

The only exception to this small business relief program is that employees of MNEs and Qualifying Free Persons need to be qualified to apply for Small Business Relief. 

  

Restriction on Tax Periods that end at or before December 31, 2026.  

There is a restriction on tax periods that end before or after December 31, 2026. 

Slight business relief is available during the Tax Period, which begins after June 1, 2023. This relief will be offered for tax periods before or after the 31st day of December 2026. For this condition to be eligible, the Revenue in the tax period in question and all tax periods prior to it must be less than or equivalent to AED 3,000,000. 

  

 Example of selecting for small-scale company assistance  

Mr X operates a business located in Abu Dhabi and operates in Abu Dhabi. The company is registered as a resident for tax purposes related to corporate entities. He began trading on January 1, 2025. his Tax Period will end at the end of December. Mr. X derived a revenue of AED 2,000,000 during the latest Tax Period that ended on December 31, 2025. 

Mr X can take advantage of Small Business Relief as he is a natural person with a business or other activity that generates revenues over 1,000,000 and does not exceed AED 3,000,000 at the end of the tax year 2025. 

Mr. X has stayed within the threshold for Revenue from prior periods, as the tax period 2025 is his first year in operation. 

He must opt in for the tax return if he wants to gain this Small Business Relief. 

  

Examples of non-residents  

ABC Ltd is a USA-incorporated firm with an office in Dubai, assisting its clients based in the UAE. ABC Ltd is a non-resident person for corporate tax purposes. In the most recent Tax Period, which ended December 31, 2024, ABC Ltd derived AED 2,500,000, including AED 1,000,000 of that Revenue due to its office in Dubai. 

ABC Ltd needs to be qualified to receive Small Business Relief since it is a Non-Resident Business regardless of its income or having a branch in Dubai. 

  

 How can ebs Chartered Accountants help your business? 

ebs Chartered Accountants is aware of the challenges that businesses face when trying to navigate the new corporate tax system that is in place within the UAE. Our team is well-versed in slight business relief and can assist businesses in understanding their ability to qualify. We provide a wide range of services that benefit companies regardless of size, the rules, comprehend, and reap the advantages of the Tax Relief program. Our team of committed and certified tax professionals have a vast understanding of the UAE’s tax landscape and specialize in Small Business Relief. 

A few of our skills in Small Business Relief are as follows: 

  

• Eligibility assessment 
• Record-keeping assistance 
• Simplified Tax return filing 
• Compliance guidance 
• Tax planning strategies. 

 

 Conclusion 

Slight business relief can be used for small-sized business owners to meet corporate tax requirements in the UAE. This tax relief program aims to make it easier for corporations to administer taxes. Small-business relief can reduce compliance requirements. However, the guide needs to be understood clearly. Comprehending the guide’s technical terms and changing concepts can take time and effort. However, you do not have to be concerned about that because the ebs team of experts can be your guide. ebs is among the most accurate bookkeeping and accounting firms in Dubai, UAE. We have assisted many companies in complying with the UAE tax system. We have over 200 active clients who provide us with excellent customer experience. We provide additional services like bookkeeping and accounting, due diligence auditing, auditing, etc. Therefore, taking advantage of your free consultation and calling us now is recommended. 

  

  

FAQs 

 

What is Small Business Relief in UAE? 

The United Arab Emirates aims to aid small-sized businesses. UAE has announced its small-business relief program. Businesses earning between AED three million can get relief on corporate taxes. 

  

 How Long Will My Business Profit from Small Business Relief in the UAE? 

Eligible businesses can take advantage of the advantages that come with Small Business Relief until December 31, 2026. This means you can run your business tax-free and not have to file all tax returns up to the end of the year. If your company exceeds AED 3 million in Revenue, the AED 3 million threshold for Revenue before 2026 will be disqualified from the relief and subject to the standard corporate tax system. 

  

 Does my company automatically qualify for Small Business Relief? 

Although businesses with annual revenues less than AED 3 million may be the primary target if eligibility is not the norm. To warrant your business’s eligibility, you must be a tax-paying resident individual (registered as a business or as an individual) and not fall within certain exceptions, such as including a global business group or currently enjoying a 0% tax rate in a tax-free zone. You should consult an experienced tax professional or use an online checker from the Federal Tax Administration to determine eligibility.