UAE Small Business Relief: End Date, Threshold, and What to Do Before Dec 31, 2026

If you run a small business in the UAE, the most expensive thing you can miss this year is the Small Business Relief deadline. The relief lets eligible SMEs elect to be treated as having no taxable income — effectively 0% corporate tax — but it sunsets at the end of 2026. Miss the election, and you fall straight into the 9% bracket on profit above AED 375,000.

This guide walks through exactly what the relief is, who qualifies, when it ends, and what you should do in Hisabi this quarter so the decision is documented and the numbers are ready when your tax adviser asks.

What is UAE Small Business Relief?

Under Ministerial Decision No. 73 of 2023 issued by the UAE Ministry of Finance, a Resident Person whose revenue in the relevant tax period and all previous tax periods does not exceed AED 3,000,000 may elect Small Business Relief. The effect: the business is treated as having no taxable income for that tax period, and the standard 9% corporate tax above AED 375,000 of taxable income does not apply.

It is an election — not automatic. You must actively elect it in your corporate tax return for the period.

When does Small Business Relief end?

The relief is available for tax periods ending on or before 31 December 2026. For most UAE SMEs on a calendar-year tax period (1 Jan – 31 Dec), the FY2026 return — filed in 2027 — is the last return where the election can be made. From FY2027 onwards, the standard corporate tax regime applies in full: 0% on the first AED 375,000 of taxable income, 9% on the excess.

If your tax period is non-calendar (e.g. licence renewal in July), the relevant cut-off is the tax period ending on or before 31 December 2026 — confirm with your tax adviser which period that is for you.

Who qualifies for the AED 3M revenue threshold?

Eligibility hinges on revenue (not profit). The AED 3,000,000 ceiling applies to the relevant tax period AND all previous tax periods. If you crossed AED 3M in any prior period, you are out — permanently — even if revenue dips below in later periods.

Revenue means gross income recognised in accordance with applicable accounting standards, before any deductions. It includes invoiced revenue across the whole licensee, not net of refunds in some narrow sense.

• Resident Person (UAE-incorporated entity or natural person carrying on business in the UAE).
• Revenue in the relevant tax period AND all previous tax periods ≤ AED 3,000,000.
• Not a Constituent Company of a Multinational Enterprise Group with consolidated revenue above AED 3.15 billion.
• Not a Qualifying Free Zone Person (those have their own 0% regime).

What happens after 31 December 2026?

Standard corporate tax applies. Taxable income up to AED 375,000 is taxed at 0%; taxable income above AED 375,000 is taxed at 9%. There is no successor relief announced. SMEs that have been comfortable not tracking detailed expenses, depreciation, or related-party transactions will have to start — because once you are in the 9% bracket, every deductible expense reduces tax.

What to do in Hisabi this year

Three jobs, all small, all in the product:

• Track revenue cumulatively. Open the Tax tab in Hisabi — the YTD revenue figure is sourced from invoice issue dates and matches what FTA expects in your return. If you are approaching AED 3M, your adviser needs to know now, not in March 2027.
• Log every expense with VAT. Even if you elect Small Business Relief and pay 0% corporate tax, your expense data becomes the baseline for FY2027 onwards. Receipts photographed in 2026 are deductible evidence in 2027 returns. Hisabi accepts photo, PDF, and email-forwarded receipts.
• Run the P&L for the tax period. The P&L tab exports a CSV grouped by category — that is the working file your tax adviser uses to prepare the return. Hand it over before the year-end so they can model both scenarios (with and without the election).

Does this affect VAT?

No. Corporate tax and VAT are separate regimes. VAT registration is mandatory once taxable supplies exceed AED 375,000 and the 5% rate applies to most goods and services regardless of whether you elect Small Business Relief. See our 2026 VAT compliance checklist for the VAT side.

Bottom line

If your revenue is under AED 3M and your tax period ends on or before 31 December 2026, election of Small Business Relief is almost certainly the right move for that period. The work to do this year is bookkeeping discipline so that (a) your adviser can confidently make the election with documented numbers, and (b) you are ready for the standard regime that kicks in afterwards.

Hisabi is built for that bookkeeping discipline. Bilingual invoices, structured expenses with VAT, live P&L and VAT statements — all the data your adviser needs, ready to export. Get started free at hisabi.ai/login.