Small Business Relief and free zones
What rate does my company pay if it does not use Small Business Relief?
Usually safe if you keep the documents
In short: 0% on the first 375,000 AED of taxable profit, and 9% on the part above.
The basic rule
Taxable profit (official term: taxable income) up to 375,000 AED is taxed at 0% and the part above at 9%, every tax year.
When it is different
- The threshold applies to taxable income (profit after adjustments), not to revenue.
- Splitting one business into several entities to use the 0% band several times can be treated as abuse.
- Qualifying Free Zone Persons have their own rates.
Documents to keep
- Financial statements
- Tax computation
How safe is it?
Usually safe if you keep the documents Low.
When to ask a professional
Not needed for the rate itself. Who can confirm it for your own case: an FTA-registered tax agent (a tax professional approved by the UAE tax authority), or the optional year-end review in SoloBooks.
Check it with the free calculator: Small Business Relief calculator →
Sources
- Federal Decree-Law No. 47 of 2022 on the Taxation of Corporations and Businesses (consolidated, unofficial English translation) — Art. 3(1)
- Cabinet Decision No. 116 of 2022 on the amount of Taxable Income subject to 0% (AED 375,000) — Art. 2 and 3
General information, not tax advice. Your situation may differ.
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Related questions
- I am a freelancer with a personal licence. Am I subject to Corporate Tax?
- Am I eligible for Small Business Relief (no Corporate Tax for small businesses)?
- What are the traps with Small Business Relief?
- I have a free zone company. Do I pay 0% or use Small Business Relief?
- Can I keep my records on a cash basis (when money comes in or goes out) instead of accruals?