Corporate Tax • 7 min read • Updated: 2026-10-22

Small Business Relief up to AED 3M: How Startups Lawfully Pay 0% Corporate Tax in UAE under Decision No. 73/2023

Breakdown of Small Business Relief (SBR) under Article 21. Allows UAE resident entities below AED 3M gross revenue to pay zero corporate tax until 2026.

Executive Summary for Directors (TL;DR)

Eligible UAE resident taxable persons generating gross revenue under AED 3,000,000 can elect for Small Business Relief (SBR) under Ministerial Decision No. 73 of 2023, paying an effective 0% Corporate Tax rate. Available for all tax periods ending on or before December 31, 2026, SBR does not eliminate the requirement to register with the FTA, maintain complete financial books, and submit annual tax returns. Attempting to artificially fragment operations to remain below the AED 3M threshold triggers severe General Anti-Abuse Rules (GAAR) under Article 50.

Author: Dinara Abdikairova, Licensed Tax Consultant (Meydan Free Zone License 2424100.01). 18+ years experience in UAE and cross-border taxation.

1. Eligibility for Small Business Relief

Available to resident businesses with annual turnover under AED 3,000,000 for periods ending on or before December 31, 2026.

2. Ongoing Filing Obligations

Electing SBR eliminates tax liability but still mandates corporate tax registration and annual simplified return filing.

Statutory Criteria, Rates & Penalty Matrix

Compliance Factor	SBR Exemption Regime (0%)	Standard Corporate Tax (9%)	Compliance Risk
Gross Revenue Ceiling	0% Corporate Tax	Gross turnover strictly below or equal to AED 3,000,000 per tax period	Generating AED 3,000,001 immediately invalidates SBR for the entire fiscal year
Tax Return Filing Requirement	Mandatory annually	Submission of simplified CT return selecting SBR election within 9 months	Penalties from AED 1,000 to AED 3,000 for failing to submit returns on time
Artificial Business Splitting (GAAR Art. 50)	9% on combined group income	Entities must demonstrate distinct economic substance, separate clients and payroll	FTA aggregates total turnover, retrospectively claws back tax + anti-abuse fines

Practical Case Studies

Financial Calculations in Dirhams (AED)

Case 1: Dubai Strategy Consultancy (Saving AED 105,750 Legally via SBR)

A boutique advisory firm generated gross turnover of AED 2,750,000 against operating expenses of AED 1,200,000. Net profit totaled AED 1,550,000.

                  Without SBR: 9% tax over AED 375k = (AED 1,550,000 - AED 375,000) × 9% = AED 105,750. Electing SBR in EmaraTax: Taxable Income deemed AED 0. Corporate Tax Payable = AED 0. Full net profit retained. Net cash saved = AED 105,750.
                

Verdict: SBR election saved AED 105,750, allowing 100% of profits to be reinvested into hiring.

Case 2: Artificial Revenue Splitting Uncovered under Article 50 (GAAR)

A founder projected revenue of AED 4,500,000 and created two duplicate trade licenses with identical staff, aiming for both to claim SBR.

                  FTA discovered shared IP, common contracts, and unified management, invoking Article 50 GAAR. Total revenue combined to AED 4,500,000 (breaching AED 3M cap). Total profit: AED 2,100,000. Reassessed tax: (AED 2,100,000 - AED 375,000) × 9% = AED 155,250 + AED 20,000 penalty = AED 175,250 total drain.
                

Verdict: Aggressive restructuring triggered Article 50 anti-abuse clawbacks totaling AED 175,250.

Primary Regulatory Reference: Ministerial Decision No. 73 of 2023 & Article 21 of Corporate Tax Law

Published by AD TAX & ACCOUNTING L.L.C FZ, Meydan Free Zone, Dubai, UAE. Phone / WhatsApp: +971 50 526 20 96.

Explore our Tax & Accounting Services → | All Knowledge Guides →