UAE FTA Warns Small Business Relief Does Not Exempt Companies From Corporate Tax Filing

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UAE FTA reminds Small Business Relief claimants that zero tax due does not remove the Corporate Tax filing duty, as the 30 September deadline nears.

The FTA has reminded UAE businesses claiming Small Business Relief that they must still register, file and keep records under the Corporate Tax Law.
Businesses whose financial year ended 31 December 2025 must file their Corporate Tax return and pay any tax due by 30 September 2026.
Small Business Relief applies where revenue stays at or below AED 3 million and treats eligible businesses as having no taxable income.
The relief must be actively elected through a simplified Corporate Tax return; it is never applied automatically.
Businesses must keep transaction, asset, liability and ownership records for seven years to support their Corporate Tax position.
Small Business Relief itself is due to expire for tax periods ending after 31 December 2026, adding pressure on eligible businesses to plan ahead.

Corporate Tax Compliance Under Federal Decree-Law No. 47 of 2022

The Federal Tax Authority (FTA) has stepped up its messaging to UAE businesses claiming Small Business Relief under Federal Decree-Law No. 47 of 2022, the Corporate Tax Law in force since June 2023. The Authority says eligibility for the relief does not remove any compliance duty set out in the law, including registration, filing and record-keeping. Businesses can manage these obligations through the EmaraTax platform, which the FTA runs around the clock.

The reminder lands as a large cohort of companies with a 31 December 2025 financial year end approach their first major filing deadline. It also follows a broader shake-up of the UAE's tax penalty regime, adding urgency for businesses that assume a zero tax bill removes the need to act. Cabinet Resolution No. 75 of 2023 still sets the baseline fines for missed deadlines, regardless of how much tax is actually due.

FTA Reminds Small Business Relief Claimants Ahead of 30 September Deadline

The FTA said Taxable Persons eligible for Small Business Relief must continue to fulfil every obligation under the Corporate Tax Law for each tax period. That includes registering for Corporate Tax, submitting a return and keeping records that support the figures declared. The Authority linked the reminder directly to the fast-approaching deadline for calendar-year businesses.

Taxpayers whose financial year ended on 31 December 2025 must submit their Corporate Tax return, or annual declaration where applicable, and settle any tax due no later than 30 September 2026. This nine-month window covers exempt persons required to register as well as ordinary Taxable Persons, and it sits within the UAE's wider run of compliance deadlines through 2026 and 2027. The FTA has not signalled any general extension for this deadline.

Abdulaziz Mohammed Al Mulla, Director General of the FTA, said the Authority remains committed to supporting the business community and easing compliance with the Corporate Tax Law and its implementing procedures. He pointed to EmaraTax as the platform that makes registration, filing and payment available at any hour, whether businesses file directly or through an FTA-approved tax agent.

How Small Business Relief Works and Why Zero Tax Does Not Mean No Return

Small Business Relief, introduced under Ministerial Decision No. 73 of 2023, lets an eligible resident person be treated as having earned no taxable income for Corporate Tax purposes. It applies where revenue stays at or below AED 3 million ($816,800) for the relevant tax period and every tax period before it, up to periods ending on or before 31 December 2026. Free zone persons taxed under the Qualifying Free Zone Person regime and members of multinational groups cannot use it.

However, the relief is optional rather than automatic. A business must actively elect it through its Corporate Tax return for each period in which it wants to benefit. Once a return is filed without that election, the choice cannot be made retroactively for that period. Electing the relief brings real simplification, since a simplified return replaces the need to calculate taxable income or attach full financial statements.

In practice, that leaves eligible businesses with four obligations they cannot skip:

Register for Corporate Tax and obtain a registration number, even if the expected tax due is zero.
Elect Small Business Relief within the Corporate Tax return for each period it applies.
File a simplified return and settle any Corporate Tax due within nine months of the tax period's end.
Keep records that support the revenue, election and eligibility figures shown in the return.

Records, Penalties and the Relief's Own Expiry Date

Core records businesses should retain include transaction records for the tax period, records of assets covering acquisitions and disposals, records of liabilities, and records of shares or ownership interests held at the period's end. The FTA uses these to verify revenue, taxable income and eligibility for Small Business Relief, and the exact documents required vary with the nature of a business's activities.

Cabinet Resolution No. 75 of 2023 sets the fines that apply when these obligations are missed, and they apply whether or not any Corporate Tax is actually due:

Violation	Administrative Penalty
Failure to keep required records	AED 10,000, rising to AED 20,000 for a repeat violation within 24 months
Late filing of a Corporate Tax return	AED 500 per month for the first 12 months, then AED 1,000 per month
Late payment of Corporate Tax due	14 per cent per year on the unpaid amount, charged monthly

The FTA separately eased its wider penalty framework through Cabinet Decision No. 129 of 2025, effective from 14 April 2026, reducing several fixed fines and adding a clearer voluntary disclosure route. That said, the fixed penalties above remain the reference point for late Corporate Tax registration, filing and record-keeping.

Small Business Relief also has a limited shelf life. It applies only to tax periods starting on or after 1 June 2023 and ending on or before 31 December 2026, so it cannot be claimed for any period ending after that date. For many small businesses, the return due on 30 September 2026 will be one of their last chances to use it.

Practical Steps for UAE Accountants and Tax Advisors

For accountants and advisors serving SMEs, the priority is separating tax liability from filing obligation in client conversations. A client with zero tax due under Small Business Relief still needs to register, elect the relief and file a simplified return by the nine-month deadline. Missing that step attracts the same late-filing fines as a fully taxable business, since the penalty rules do not distinguish between the two.

Advisors should also confirm that revenue calculations follow accounting standards accepted in the UAE, since the FTA has flagged artificially separated businesses as a risk area. Our guide to Corporate Tax and Small Business Relief for freelancers and small business owners sets out the registration and election steps for clients weighing up whether to elect the relief each year.

What Clients are Asking their Advisors

What is Small Business Relief under UAE Corporate Tax?

Small Business Relief lets an eligible UAE resident business be treated as having no taxable income for Corporate Tax purposes. It applies where revenue stays at or below AED 3 million in the current tax period and every period before it, up to periods ending on or before 31 December 2026. It must be elected in the Corporate Tax return.

Do I still need to register for Corporate Tax if I expect to pay no tax?

Yes. Every Taxable Person must register for Corporate Tax through EmaraTax and obtain a registration number, regardless of expected tax liability or Small Business Relief eligibility. Registration deadlines are set by licence issuance date or incorporation date, not by how much tax a business expects to owe.

Have UAE Corporate Tax penalties changed in 2026?

The FTA eased parts of its wider administrative penalty framework under Cabinet Decision No. 129 of 2025, effective 14 April 2026, reducing some fixed fines and adding a clearer voluntary disclosure route. The core penalties for late Corporate Tax registration, filing and record-keeping under Cabinet Resolution No. 75 of 2023 continue to apply.

When does Small Business Relief expire?

Small Business Relief applies only to tax periods starting on or after 1 June 2023 and ending on or before 31 December 2026. No extension has been announced, so businesses that rely on it should prepare for full Corporate Tax compliance from 2027 onwards.