Website Last updated:

May 15, 2026

This Guide, CTGSBR1, provides official guidance on the Small Business Relief under Article 21 of the UAE Corporate Tax Law (Federal Decree-Law No. 47 of 2022). It details the eligibility criteria for Resident Persons whose Revenue does not exceed AED 3 million in the relevant and previous tax periods. An eligible person can elect to be treated as having no Taxable Income, providing significant tax and administrative relief. The guide clarifies that members of MNE groups and Qualifying Free Zone Persons are ineligible. It also outlines compliance obligations and the FTA's anti-abuse powers concerning artificial separation.

Small Business Relief

Corporate Tax Guide | CTGSBR1

August 2023

1. Glossary

2. Introduction

2.1. Overview
1. 2.1.1. Short brief
  2.1.2. Purpose of the guide
  2.1.3. Who should read this guide?
  2.1.4. How to use this guide
  2.1.5. Legislative references
  2.1.6. Status of this guide

3. What is Small Business Relief?

3.1. Who is not eligible for Small Business Relief?
1. 3.1.1. Members of an MNE
  3.1.2. Qualifying Free Zone Persons
  3.1.3. Artificial separation
3.2. How does Small Business Relief work?
1. 3.2.1. What does it mean to have no Taxable Income?
  3.2.2. Tax Losses
  3.2.3. General Interest Deduction Limitation Rule
  3.2.4. Other reliefs
  3.2.5. Exempt Income
3.3. How to elect for Small Business Relief

4. Eligibility conditions for Small Business Relief

4.1. Restriction to Tax Periods ending on or before 31 December 2026
4.2. Illustrative examples
4.3. What is a Resident Person?
1. 4.3.1. Natural Persons
  4.3.2. Juridical Persons
  4.3.3. Exclusion of members of MNEs
  4.3.4. Exclusion of Qualifying Free Zone Persons
  4.3.5. Permanent Establishments of Non-Resident Persons
  4.3.6. UAE sourced income and foreign income
  4.3.7. Accounting standards for Revenue calculation
  4.3.8. Implications for Resident Persons that are VAT registered
4.4. Illustrative examples

5. Impact of the Small Business Relief on other Corporate Tax rules

5.1. Tax Losses
1. 5.1.1. Implications of election for Small Business Relief on Tax Losses
  5.1.2. Illustrative examples
5.2. General Interest deduction limitation rules
1. 5.2.1. Implications of election for Small Business Relief on General Interest Deduction Limitation Rule
5.3. Exempt Income
1. 5.3.1. Interaction between Exempt Income and Small Business Relief
5.4. Other Reliefs
1. 5.4.1. Implications of election for Small Business Relief on other reliefs
5.5. Deductions
1. 5.5.1. Deductible expenditure rules do not apply to those who elect for Small Business Relief
5.6. Transfer pricing documentation
1. 5.6.1. Transfer pricing documentation requirements for those who elect for Small Business Relief
5.7. Participation Exemption for owners of UAE Juridical Persons that elect for Small Business Relief
5.8. Tax Groups and Small Business Relief

6. Compliance obligations, record keeping requirements, and administration for Small Business Relief

6.1. Requirement to self-assess, register and make an election
6.2. Requirement to file Tax Returns
6.3. Records required to be kept to demonstrate Revenue
6.4. Record keeping period

7. Artificial separation

Contents