Corporate Tax UAE for SMEs: Thresholds, Small Business Relief and What You Must Do

UAE corporate tax applies to most licensed businesses. The headline rates are simple: 0% on taxable income up to AED 375,000 and 9% on the portion above that. Many SMEs can also elect Small Business Relief if revenue stays at or below AED 3 million in the current and all previous tax periods — and that relief now runs through tax periods ending on or before 31 December 2029. This guide covers who is in scope, the rates, registration, Small Business Relief, the nine-month filing and payment deadline, and the seven-year record rule.

This article is general guidance based on Federal Tax Authority (FTA), Ministry of Finance and UAE Government sources checked on 6 November 2026. It is not tax or legal advice for your specific situation. Rules change — confirm current requirements with the FTA or a registered tax agent before you act.

Who is in scope for Corporate Tax?

Corporate Tax is governed by Federal Decree-Law No. 47 of 2022 on the Taxation of Corporations and Businesses. Businesses became subject to UAE Corporate Tax from the beginning of their first financial year that started on or after 1 June 2023 (u.ae – Corporate tax).

According to the UAE Government portal, Corporate Tax applies to:

• businesses and individuals conducting business activities under a commercial licence in the UAE
• free zone businesses (subject to free-zone incentive rules where they qualify)
• foreign entities and individuals that conduct a trade or business in the UAE in an ongoing or regular manner
• banking operations
• businesses engaged in real estate management, construction, development, agency and brokerage activities

Certain categories are Exempt Persons (for example specified government entities, some extractive and non-extractive natural-resource businesses, qualifying public benefit entities, and certain funds), often subject to notification or Cabinet listing conditions (u.ae – Corporate tax). Do not assume an exemption without checking the law and FTA guidance. If you run a licensed UAE business, treat Corporate Tax registration, filing and records as live obligations unless a clear exemption applies.

Corporate Tax rates: 0% up to AED 375,000, 9% above

The standard rates published by the UAE Government are (u.ae – Corporate tax):

Taxable income	Rate
Up to AED 375,000	0%
Above AED 375,000	9%

Federal Decree-Law No. 47 of 2022 sets the same structure in Article 3: 0% on the portion of Taxable Income not exceeding the Cabinet-specified amount, and 9% on the excess (FDL 47/2022). A different rate may apply to large multinationals under Pillar Two criteria — generally outside the typical SME picture.

These rates apply to Taxable Income, not every dirham of revenue. Clean ledgers, correct cut-off, and a trail from accounts to the return are what make the AED 375,000 band usable in practice. For related VAT filing discipline, see our guide on VAT filing in the UAE.

Corporate Tax registration on EmaraTax

All taxable persons must register with the FTA and obtain a Corporate Tax Registration Number (FTA – Corporate Tax Registration). Registration is free on EmaraTax (24/7). The FTA’s published estimate is about 20 business days to complete a properly submitted application.

A practical sequence:

1. Register and activate an EmaraTax account.
2. Create (or open) the Taxable Person profile.
3. From the Corporate Tax action menu, choose Register.
4. Complete entity, licence, ownership and signatory details.
5. Upload required documents (typically incorporation documents, commercial registration or licensing documents, valid trade licence, Emirates ID and passport for owners holding more than 25% and for authorised signatories, plus proof of authorisation).

Timelines for juridical and natural persons are set out in Federal Tax Authority Decision No. 3 of 2024 (referenced on the FTA registration service page). Natural persons conducting a business or business activity generally register when annual revenues from that activity exceed the registration threshold; the FTA notes that salary, private investment income and real estate investment income are excluded from that calculation, and that the published natural-person threshold is AED 1 million within a calendar year. UAE branches of a domestic juridical person are an extension of the head office and are not required to register or file separately.

Small Business Relief: AED 3 million threshold to 2029

Small Business Relief is the SME-facing election under Article 21 of the Corporate Tax Law and Ministerial Decision No. 73 of 2023 (as amended by MD 131 of 2026).

Who can elect?

Per the FTA Small Business Relief page:

• You must be a Resident Person (natural or juridical).
• You elect for each Tax Period.
• Revenue must be equal to or less than AED 3,000,000 in both the current Tax Period and all previous Tax Periods.

What the relief does

If you validly elect, you are treated as not having derived any Taxable Income for that Tax Period. Other exemptions, reliefs and deductions are not available for that period. Transfer pricing documentation is not required, but you must still comply with the arm’s length principle (FTA SBR).

Who cannot elect?

SBR is not available to a Qualifying Free Zone Person, or to a member of a multinational enterprise (MNE) group with consolidated group revenue of more than AED 3.15 billion (FTA SBR; MoF news on MD 73/2023).

Extended through tax periods ending 31 December 2029

The original MD 73/2023 window ended with tax periods ending on or before 31 December 2026. Ministerial Decision No. 131 of 2026 replaced that end date: the AED 3 million threshold continues to apply to subsequent Tax Periods that end on or before 31 December 2029 (MD 131/2026; listed on MoF Financial Legislation). Older MoF summaries that still mention 31 December 2026 are superseded by MD 131.

Once you break AED 3 million

If revenue exceeded AED 3 million in a prior Tax Period, you cannot elect SBR later even if a later period’s revenue is under AED 3 million (FTA SBR; MoF news).

Losses are not carried forward from an SBR period

When SBR applies, Tax Loss relief under the Corporate Tax Law does not apply for that period (Article 21 of FDL 47/2022). MoF’s explanation of MD 73/2023 is that Tax Losses from periods where you do not elect SBR can be carried forward for use in future periods where SBR is also not elected (MoF news). In plain terms: losses incurred in a period where you elect SBR are not available to carry forward. Keep revenue evidence for every period so you can support the election if the FTA asks.

Filing and payment: nine months after the tax period ends

A Taxable Person must file a Corporate Tax return no later than nine months from the end of the relevant Tax Period (Article 53 of FDL 47/2022). Corporate Tax payable must be settled on the same nine-month timeline (Article 48).

For Taxable Persons whose Taxable Period ended on 31 December 2025, the FTA set 30 September 2026 as the deadline to file and pay. That includes persons eligible for Small Business Relief — SBR electors still file (FTA news, 26 September 2026).

File and pay on EmaraTax (directly or via an approved tax agent). Example: financial year ending 31 December → return and payment due by the following 30 September.

Records: keep them for seven years

Article 56 of Federal Decree-Law No. 47 of 2022 requires a Taxable Person to maintain all records and documents for seven years following the end of the Tax Period to which they relate, so that they support the Tax Return and allow Taxable Income to be readily ascertained (FDL 47/2022, Art. 56). The FTA’s September 2026 reminder stressed keeping documents that support Revenue, Taxable Income and SBR eligibility (FTA pr.2809).

For an SME that usually means ledgers, invoices, bank reconciliations, Corporate Tax / SBR working papers, and licence or ownership documents where relevant. Build seven-year retention into your bookkeeping routine now.

What SME owners should do next

1. Confirm whether you are a Taxable Person and whether any exemption could apply.
2. Check Corporate Tax registration status on EmaraTax.
3. Map your Tax Period end date and the nine-month filing/payment deadline.
4. Test SBR eligibility: revenue ≤ AED 3 million in the current and every prior Tax Period; confirm you are not a Qualifying Free Zone Person or MNE-group member above AED 3.15 billion consolidated revenue.
5. Decide whether to elect SBR — remembering that losses from an elected period do not carry forward.
6. Close the books, prepare working papers, file on EmaraTax, and pay any Corporate Tax due within nine months.
7. Archive records for seven years after the Tax Period ends.

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Frequently asked questions

What is the Corporate Tax rate in the UAE for SMEs?

0% on taxable income up to AED 375,000, and 9% on taxable income above that amount (u.ae).

What is Small Business Relief in the UAE?

An election for Resident Persons with revenue of AED 3 million or less in the current and all previous Tax Periods. If elected, you are treated as having no Taxable Income for that period. It is not available to Qualifying Free Zone Persons or members of MNE groups above the AED 3.15 billion consolidated-revenue threshold (FTA SBR).

How long does Small Business Relief last?

Under MD 131 of 2026, the AED 3 million threshold continues to apply to Tax Periods that end on or before 31 December 2029 (MD 131/2026).

When is the Corporate Tax return due?

Within nine months of the end of your Tax Period. Payment of Corporate Tax due follows the same deadline (Articles 53 and 48 of FDL 47/2022; FTA pr.2809).

Do I still file if I elect Small Business Relief?

Yes. Taxable Persons eligible for Small Business Relief must still file Tax Returns (and pay any Corporate Tax due) within nine months of the Tax Period end (FTA pr.2809).

How long must I keep Corporate Tax records?

Seven years after the end of the Tax Period to which the records relate (FDL 47/2022, Art. 56).

Let Dubai Bookkeepers support your Corporate Tax readiness

Dubai Bookkeepers keeps monthly books reconciled, prepares working papers that support Corporate Tax and VAT filings, and helps SME owners get EmaraTax-ready before the nine-month deadline. Whether you are checking Small Business Relief eligibility or tightening seven-year record retention, start with our services or packages.

Sources checked 6 November 2026. Tax rules change, so confirm current requirements on tax.gov.ae or with a registered tax agent before you act. This is general information only — not tax or legal advice.

Sources

• u.ae – Corporate tax (rates, scope) — checked 6 Nov 2026
• FTA – Small Business Relief — checked 6 Nov 2026
• MD 131 of 2026 (SBR to 31 Dec 2029) — checked 6 Nov 2026
• MoF news – MD 73 of 2023 — checked 6 Nov 2026
• FTA pr.2809 (9-month filing/payment) — checked 6 Nov 2026
• Federal Decree-Law No. 47 of 2022 (Arts. 3, 21, 48, 53, 56) — checked 6 Nov 2026
• FTA – Corporate Tax Registration — checked 6 Nov 2026