UAE Corporate Tax: Small Business Relief Explained
The UAE introduced Small Business Relief (SBR) to support small businesses during the initial implementation of the Corporate Tax regime. Learn how your company can benefit from 0% taxable income status.
Tariq Al-Mansoor
Senior Tax & Compliance Advisor
Small Business Relief treats eligible taxable persons as having no taxable income for tax periods ending on or before 31 December 2026.
Executive Advisory Takeaways
- Revenue threshold: Gross revenue must not exceed AED 3,000,000 for relevant and previous tax periods.
- Relief eligibility is available for tax periods starting on or after 1 June 2023 and ending on or before 31 December 2026.
- Qualifying Free Zone Persons and members of Multinational Enterprise (MNE) groups are excluded from SBR.
- Corporate Tax registration remains mandatory even if electing for Small Business Relief.
What is Small Business Relief (SBR)?
Under Ministerial Decision No. 73 of 2023, resident taxable persons with revenue not exceeding AED 3,000,000 in any relevant tax period may elect to be treated as having derived no taxable income during that period.
This critical provision significantly lowers compliance overhead for startups, independent consultancies, and emerging SMEs operating across the UAE.
Critical Caveats and Anti-Abuse Rules
While SBR provides substantial tax savings, businesses electing for SBR cannot carry forward tax losses or unutilized net interest expenditure from that tax period.
Furthermore, the Federal Tax Authority enforces stringent General Anti-Abuse Rules (GAAR) to prevent artificial splitting of businesses designed purely to stay beneath the AED 3M revenue cap.
Related Topics
Tariq Al-Mansoor
Senior Tax & Compliance Advisor at Emirate Hub
Specialized in UAE corporate compliance, mainland & free zone formation, tax structuring, and business setup strategies in Dubai.
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