Small Business Relief has allowed many UAE businesses with revenue of AED 3 million or less to treat their taxable income as nil. Under the current rules, it is only available for tax periods ending on or before 31 December 2026. For a business with a calendar financial year, 2026 is the last year it can be claimed, unless the rules are extended.
What happens afterwards
Once the relief is no longer available, small businesses calculate their taxable income in the normal way. The 0% band on the first AED 375,000 of taxable income still applies, and 9% applies above that. For many small businesses, the tax will remain modest, but it will no longer be automatically nil.
Why preparation matters
While claiming the relief, some businesses have treated their tax return as a formality. From the first period after the relief ends, the return needs proper figures:
- taxable income calculated from reliable financial statements;
- adjustments for non-deductible expenses and connected person payments; and
- supporting records kept for seven years.
Businesses whose bookkeeping has been light will feel this most.
Losses
While a business claims Small Business Relief, tax losses from those periods cannot be carried forward. Plan with that in mind if you expect a loss in 2026.
What to do in 2026
- Get your bookkeeping in order now, so your first full calculation is straightforward.
- Review payments to owners and family members, which must reflect market value to be deductible.
- Estimate your likely tax for the first year after the relief, and plan cash flow for it.
- Watch for announcements. If the relief is extended or changed, the planning will need revisiting.
If you would like help preparing for life after Small Business Relief, please get in touch.
This article is general information based on the rules as we understand them at the date of publication. It is not advice on your circumstances. Laws and practice change, so please speak to us before acting on it.
