If your UAE company has paid zero corporate tax under Small Business Relief, that arrangement has an expiry date. The relief covers tax periods ending on or before 31 December 2026, and the Ministry of Finance has announced no extension. For most mainland SMEs, the next return after that is the first one with a real tax bill. The size of that bill depends on a date you might not have checked: your financial year-end.
TL;DR: UAE Small Business Relief ends for tax periods ending after 31 December 2026. A December year-end keeps the relief through the period ending 31 December 2026; a June or March year-end loses it sooner, because that period ends earlier. After it ends, you pay 0% on the first AED 375,000 of taxable income and 9% above. The election stays available until then, but electing in a loss-making final year wastes the loss.
When Does Small Business Relief Actually End?
The relief applies to any tax period that ends on or before 31 December 2026, so your last eligible period depends on your year-end (Federal Tax Authority, 2026). It is the period end date that matters, not the start date.
That single rule produces different cut-offs:
- A December year-end qualifies for the period 1 January to 31 December 2026, then pays tax from 2027.
- A June year-end qualifies for the period ending 30 June 2026. The next period, ending 30 June 2027, falls outside the window.
- A March year-end qualifies for the period ending 31 March 2026. Its first taxable period began 1 April 2026 and is already running.
What we see most often is owners assuming "it ends in 2026" means they have until December. A non-December year-end loses the relief at its own period end, which can be months earlier. If your year-end is not 31 December, check which side of the line your current period sits on.
What Happens to Your Tax Bill After the Relief Ends?
You move onto the standard corporate tax regime: 0% on taxable income up to AED 375,000, and 9% on everything above that (UAE Ministry of Finance, 2023). Revenue size no longer shelters you once the relief is gone.
Take a business with AED 1,000,000 of taxable income in its first post-relief period. The first AED 375,000 is taxed at 0%. The remaining AED 625,000 is taxed at 9%, which is AED 56,250. That is the jump from a zero filing to a real liability, and it lands in the same nine-month filing window you already use.
The cash impact is the part owners underestimate. A business that has filed zero returns for two or three years has never had to set money aside for corporate tax. The first payment is due nine months after the period ends, so a December 2027 year-end means payment by 30 September 2028. Start reserving for it now rather than finding the number on the return.
How the AED 375,000 Band Differs From the Relief
The AED 375,000 threshold is permanent and separate from Small Business Relief. Every taxable person pays 0% on taxable income up to AED 375,000, regardless of revenue, for as long as the regime exists (PwC UAE Tax Summary, 2026).
Small Business Relief did something different. It treated qualifying businesses as having zero taxable income entirely, even where profit would have pushed past AED 375,000. So a profitable business with AED 600,000 of taxable income paid nothing under the relief, but will pay 9% on the AED 225,000 above the band once the relief ends.
The distinction matters for the businesses that benefited most: those with healthy margins and profit comfortably over AED 375,000. They had the largest tax saving under the relief, so they face the largest increase when it goes. For an early-stage business that never made AED 375,000 of profit, the change is closer to neutral. We cover the wider rate structure in our UAE corporate tax guide.
Should You Still Elect in Your Final Eligible Period?
Only if you expect that period to be profitable. The election treats you as having no taxable income, but in exchange you give up the right to carry forward a tax loss from that period (FTA Small Business Relief Guide, 2023).
In a profitable final year, electing is the obvious move: you wipe out the tax and there is no loss to lose. In a loss-making final year, electing is expensive. If you make a AED 150,000 loss in your last eligible period and elect the relief, that loss disappears. Skip the election, file normally, and you can carry the loss forward to offset taxable profit in 2027 or later, when you will actually owe tax.
One question clients always ask is whether they can change their mind after filing. The election is made on the return for each period, so the decision is locked once that return is submitted. This is the year to model the final period before you tick the box, not after. Our walkthrough of your first UAE corporate tax return covers the mechanics of the filing itself.
What Should You Do Now to Prepare?
Three things, in order. First, confirm your exact last eligible period from your year-end, so you know which return is your first taxable one. Second, build a forecast of taxable income for that first taxable period, so the 9% figure is not a surprise. Third, get your bookkeeping to a standard that supports a real tax computation rather than a zero filing.
Timing can help at the margin where it is legitimate. Bringing forward a planned, genuine expense into a period that will be taxed, or recognising income in a relief-covered period where the accounting standard allows, can shift profit across the line. This is ordinary timing, not artificial arrangement, and the FTA's general anti-abuse rule sits behind any move that exists only to dodge tax.
The bigger win is usually clean records and an accurate forecast. A business that knows it owes roughly AED 56,250 next September can plan for it. A business that finds out on the return cannot. Our UAE year-end planning checklist covers what to have ready 90 days before your period end.
Frequently Asked Questions
Will the UAE extend Small Business Relief past 2026?
No extension has been announced. Ministerial Decision No. 73 of 2023 limits the relief to tax periods ending on or before 31 December 2026, and the Ministry of Finance has not signalled any change (UAE Ministry of Finance, 2023). Plan on the basis that it ends, and treat any future extension as a bonus rather than an assumption.
My year-end is 30 June. When is my last 0% period?
The period ending 30 June 2026, assuming you meet the AED 3 million revenue condition. Your next period runs 1 July 2026 to 30 June 2027, which ends after 31 December 2026 and falls outside the relief. That first taxable period is already part-way through, so a forecast now is worth doing.
Do I still have to file a return after the relief ends?
Yes. Filing has always been mandatory for every registered taxable person, relief or not. After the relief ends you file the same return, but with a tax computation and, where taxable income exceeds AED 375,000, a payment. The deadline remains nine months from your period end.
Does the AED 375,000 0% band disappear too?
No. The AED 375,000 band is a permanent feature of the corporate tax regime and is not tied to Small Business Relief. Every business keeps 0% on its first AED 375,000 of taxable income after the relief ends. Only the broader zero-income election goes away.
Can free zone companies use Small Business Relief in the meantime?
A Qualifying Free Zone Person electing the 0% free zone regime cannot also claim Small Business Relief. Free zone businesses generally rely on the qualifying income rules instead, which we explain in our free zone corporate tax guide. The transition planning here applies mainly to mainland resident businesses.
Not sure which return is your last 0% filing, or what your first real tax bill looks like? Get in touch - we work with UAE SMEs across mainland and free zones, and can map your year-end, model the transition, and have your numbers ready before the relief runs out.