Who qualifies for the UAE’s extended 0% corporate tax rate?

Revenue is determined using accounting standards accepted in the UAE.

UAE resident businesses with annual revenue of no more than $816,882 (AED3 million) can continue claiming Small Business Relief for tax periods ending on or before December 31 2029.

Ministry of Finance Ministerial Decision No. 131 of 2026 extends the relief by three years from its previous December 31 2026 end date. Eligibility remains subject to existing revenue history, residency and exclusion tests.

Small Business Relief is not a separate statutory 0% corporate tax rate. Article 21 of the Corporate Tax Law lets an eligible Resident Person elect to be treated as having derived no taxable income for that tax period. Separate corporate tax rules apply 0% to taxable income up to $102,110 (AED375,000) and 9% above that level.

Revenue test covers every tax period

Eligible taxpayers must keep revenue at or below $816,882 (AED3 million) in the relevant tax period and all previous relevant periods. FTA guidance confirms that the revenue test applies across the taxpayer’s history within the relief period.

Revenue exceeding the threshold in any relevant or previous tax period prevents the taxpayer from electing for Small Business Relief in a subsequent period. Revenue is determined using accounting standards accepted in the UAE.

Ministerial Decision No. 131 changes the expiry provision in Article 2 of Ministerial Decision No. 73. Revenue thresholds continue to apply to tax periods commencing on or after June 1 2023. Eligible subsequent periods can now end as late as December 31 2029.

Companies cannot reset their eligibility simply because revenue later falls below the threshold. An earlier breach remains relevant when assessing a later Small Business Relief election.

Resident businesses and individuals can qualify

Resident Persons can include juridical persons such as UAE companies and natural persons conducting taxable business activities. FTA guidance identifies both categories as potentially eligible for Small Business Relief.

Natural persons enter the corporate tax regime when turnover from UAE Businesses or Business Activities exceeds $272,294 (AED1 million) during a Gregorian calendar year.

Small Business Relief can then apply where the person meets the separate $816,882 (AED3 million) revenue ceiling and the other conditions.

Ministerial rules exclude two categories from Small Business Relief. Qualifying Free Zone Persons cannot elect for the relief. Constituent companies of specified multinational enterprise groups are also excluded.

Free zone registration itself is not the exclusion written into the Small Business Relief decision. Qualifying Free Zone Person status is the specified restriction. Qualifying Free Zone Persons operate under separate corporate tax provisions covering qualifying income.

Filing obligations continue under the relief

FTA requires eligible businesses to register for corporate tax, submit a corporate tax return and elect Small Business Relief through that return. Relief reduces the filing information required rather than removing the filing requirement.

Taxpayers must retain records supporting revenue, taxable income and eligibility. Businesses also need transaction records and documentation covering assets, liabilities and ownership interests where applicable.

Businesses generally have nine months from the end of their tax period to file and settle corporate tax liabilities. FTA confirmed that taxpayers with financial years ending December 31 2025 face a September 30 2026 filing and payment deadline.

Eligible taxpayers using Small Business Relief still need sufficient accounting records to prove revenue remained within the threshold throughout the applicable periods.

Anti-abuse provisions remain in force

Artificially separating a business to bring individual entities below $816,882 (AED3 million) can trigger the Corporate Tax Law’s general anti-abuse provisions. FTA assessments can examine commercial purpose alongside financial, economic and organisational links between the parties.

Business owners electing the relief also surrender certain tax attributes for that period. Tax losses incurred during a relief period cannot be carried forward. Net Interest Expenditure generated during that period also cannot be carried forward.

Prior unused losses from periods where Small Business Relief was not elected remain subject to the Corporate Tax Law’s normal carry forward conditions. Ministerial Decision No. 131 extended the relief period to 2029 without changing those underlying eligibility and anti abuse provisions.