Check Small Business Relief eligibility and the tax it saves.
Eligibility
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Tax without relief
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Tax saved if elected
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What the relief actually does to your tax bill
The UAE introduced federal corporate tax for financial years starting from June 2023. The headline structure is straightforward: the first slice of taxable income is taxed at zero, and income above that threshold is taxed at the rate this calculator applies, which is 9 percent, with the zero band set at AED 375,000. Small Business Relief sits on top of that as an election a resident business can make. When you elect it, the law treats your business as having no taxable income for the period at all. Your corporate tax for that period becomes nil, not merely reduced. That is a different mechanism from the zero band, which only shelters the first AED 375,000.
These figures, the AED 3 million revenue cap and the 31 December 2026 sunset, are the assumptions this tool applies, and you should confirm the current position with the UAE Federal Tax Authority before you file. The FTA publishes the relief conditions and any extension to the window, and because UAE corporate tax is young, the detail is still settling.
A look at AED 450,000 of profit
Take the default scenario, run on the rates this calculator applies. Revenue is AED 2.5 million, comfortably under the AED 3 million cap, taxable income is AED 450,000, and the period ends on 31 December 2026, inside the sunset. The tool first works out what you would owe under the standard rules, then shows that the whole of it is saved if you elect the relief.
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The bar makes the size of the saving plain against the profit it sits on.
The striking part is the effective rate. AED 6,750 on AED 450,000 of profit is only about 1.5 percent, because the zero band already protects most of the income before the relief even applies. On small profits, the relief saves a modest absolute sum. Its real value grows as your taxable income climbs further above AED 375,000, since the standard bill it wipes out gets larger.
The condition this tool cannot see
Here is the trap to watch. This calculator checks your revenue for the current period against the AED 3 million cap. The FTA rule is stricter: your revenue must not have exceeded AED 3 million in the current period and in every prior period since corporate tax began. One earlier year above the cap can disqualify you even if this year sits comfortably below it. So a green light here is a starting point, not a final answer. Pull your past returns and check them all before you elect.
The second edge case is timing. The relief is available only for tax periods ending on or before 31 December 2026 as modelled here. If your period ends a day after that sunset, the tool flips to not eligible, and unless the FTA extends the window, you would fall back to the standard 9 percent treatment. A practical tip: the election is made in the tax return itself, so it is a conscious choice each period, not automatic. Some businesses deliberately skip the election in a loss-making year to preserve tax losses they can carry forward, which the relief would otherwise extinguish. Weigh that before ticking the box.
Questions business owners ask
If I elect the relief, do I still have to register and file?
Yes. Small Business Relief removes the tax, not the obligations. You still register for corporate tax with the FTA and submit a return for the period, and the election itself is made inside that return. Skipping registration or filing because you expect a nil bill is a compliance risk, not a shortcut. Treat the paperwork as mandatory even when the tax is zero.
Does electing the relief hurt me if I plan to grow past AED 3 million?
It can, in one specific way. While you are claiming the relief you are treated as having no taxable income, so you generally cannot build up tax losses to carry into future profitable years. If you are about to scale past the cap and expect to be taxed at 9 percent soon, model both paths in a year you make a loss. Sometimes paying nothing now is worth less than banking a loss you can use later, and that judgement belongs with your accountant and the FTA guidance.