UAE corporate tax for small businesses: rates, registration, Small Business Relief and filing deadlines

UAE corporate tax applies to financial years starting on or after 1 June 2023, at 0% on taxable income up to AED 375,000 and 9% above it. Every taxable business — mainland or free zone, company or qualifying natural person — must register with the Federal Tax Authority, and registering late carries an AED 10,000 penalty. For small businesses the headline option is Small Business Relief: with revenue of AED 3,000,000 or less you can elect to be treated as having no taxable income — but the relief only covers tax periods ending on or before 31 December 2026, so the period you are in now is, for most businesses, the last one it can cover.

The rates, and what "taxable income" means

Corporate tax is charged on taxable income — accounting profit per your financial statements, adjusted per the law — not on revenue:

Because the calculation starts from accounting profit, the practical foundation of corporate-tax compliance is unglamorous: complete, reconciled books. Missing expense records inflate profit; an unreconciled ledger makes the return an estimate.

Who must register

Registration through the FTA's EmaraTax portal is mandatory for taxable persons — regardless of size, and regardless of whether any tax will be due:

• Companies (mainland and free zone), from incorporation.
• Natural persons — freelancers, sole establishments, civil-company partners — once turnover from business activity exceeds AED 1,000,000 in a calendar year. Wages, personal investment income and personal real-estate income don't count toward that threshold.

The FTA's registration timelines are tied to licence issuance dates (and to the threshold year for natural persons); the administrative penalty for late registration is AED 10,000. If you hold a licence and haven't registered, treat it as urgent rather than pending.

Small Business Relief — and its expiry

Small Business Relief (SBR), set out in Ministerial Decision No. 73 of 2023, lets a resident taxable person elect to be treated as having no taxable income for a tax period when revenue for that period and all prior periods is AED 3,000,000 or less.

Three things small businesses regularly miss:

1. It's an election, made in the return — not automatic. You still register, keep books and file.
2. It expires: the relief applies only to tax periods ending on or before 31 December 2026. From your first period ending after that date, the normal 0%/9% bands are what remain.
3. It doesn't combine with everything — a Qualifying Free Zone Person's 0% regime and SBR are alternatives, not a stack, and periods under SBR have knock-on effects (for example on carrying forward losses).

Planning point for right now: if your financial year is the calendar year, 2026 is your final SBR period. Budgeting 2027 onward should assume the ordinary bands.

Free zone companies, briefly

Free zone entities are inside the regime and register like everyone else. A Qualifying Free Zone Person can enjoy 0% on qualifying income (with 9% on the rest), subject to substance, activity and de-minimis conditions that deserve their own article. The practical takeaway for a small free-zone business: "free zone" is not an exemption from registration, bookkeeping or filing.

Filing: one return, nine months

Each tax period (your financial year) produces one corporate tax return, due — together with any payment — within 9 months of the period's end:

The return is prepared from your accounts, so the deadline that actually matters is continuous: books that are complete and reconciled all year make the filing a formality; books reconstructed in month eight make it a project.

SnapLedger keeps the underlying engine honest year-round — documents and bank statements reconcile into a double-entry ledger, and the corporate-tax view builds from those books rather than from a year-end scramble.