Who is Eligible?
A business may elect for Small Business Relief if it meets all of the following conditions:
- It is a UAE Resident Taxable Person (A Company incorporated in the UAE is a resident Taxable Person).
- Its revenue does not exceed AED 3 million in the current tax period.
- Its revenue has not exceeded AED 3 million in any previous tax period for which the relief applies.
- It is not a Qualifying Free Zone Person (QFZP).
- It is not part of a large Multinational Enterprise (MNE) Group that falls within Pillar Two rules (consolidated group revenue exceeding approximately EUR 750 million / AED 3.15 billion).
Important: The AED 3 million threshold is based on revenue (turnover), not profit. A company making high profits can still qualify if its revenue remains at or below AED 3 million.
How Do You Select Small Business Relief?
Small Business Relief is not automatic.
Eligible businesses must elect for the relief when filing their Corporate Tax Return through the EmaraTax portal. The election is made within the tax return for the relevant period by confirming eligibility and selecting the relief option.
Until When Is the Relief Available?
The relief is currently available for tax periods ending on or before 31 December 2029, following the issuance of Ministerial Decision No. 131 of 2026, which extended the availability of Small Business Relief by an additional three years.
Businesses should continue to assess their eligibility annually and elect for the relief through their Corporate Tax Return for each qualifying tax period.
What Is Still Required?
Even when electing Small Business Relief, businesses are not completely exempt from compliance obligations. They should:
- Register for UAE Corporate Tax.
- Maintain proper accounting records and supporting documentation.
- Prepare financial statements showing revenue levels.
- File their Corporate Tax Return on time.
- Retain records to support eligibility for the AED 3 million revenue threshold.
Key Considerations
- The election is made separately for each tax period; it does not automatically continue year after year.
- Once revenue exceeds AED 3 million, the business generally loses eligibility for the relief.
- Businesses should assess whether claiming SBR is beneficial, particularly where tax losses or other tax attributes may be relevant.
Conclusion
Small Business Relief is a valuable UAE Corporate Tax concession that provides qualifying SMEs with the opportunity to pay 0% Corporate Tax while reducing compliance complexity.
However, eligibility must be carefully assessed, the election must be made through the Corporate Tax return, and normal record-keeping and filing obligations remain in place. Businesses with annual revenue of AED 3 million or less should review their position each year and consider electing for the relief while it remains available through 31 December 2029, provided they continue to meet all eligibility requirements.
