UAE Corporate Tax — Small Business Relief (SBR)
Small Business Relief (SBR) is a simplification measure under UAE Corporate Tax that allows small businesses to treat their taxable income as nil for a tax period, provided they meet the eligibility conditions.
Eligibility Conditions
To qualify for SBR, a business must:
- Have revenue of AED 3 million or less in the relevant tax period
- Not be a Qualifying Free Zone Person (QFZPs cannot claim SBR)
- Not be a member of a multinational enterprise group (MNE group with consolidated revenue above AED 3.15 billion)
- Actively elect SBR in their CT return for that period
The AED 3 million threshold applies per tax period and is not cumulative. It is assessed each year independently.
What SBR Means in Practice
If you elect SBR:
- Your taxable income is treated as AED 0 for that period
- Your CT liability is AED 0
- You still need to file a CT return
- You cannot carry forward or use tax losses from that period
- Transfer pricing documentation rules are simplified
SBR Is Not Automatic
Many small businesses assume SBR applies automatically. It does not. You must actively elect SBR when filing your CT return via the EmaraTax portal. If you miss the election, you are assessed under the standard CT rules.
SBR and Future Growth
SBR is available for tax periods ending on or before 31 December 2026 (per Ministerial Decision No. 73 of 2023). If your revenue exceeds AED 3 million in any period, you cannot claim SBR for that period and must file under the standard CT rules.
How Kounted Can Help
Kounted assesses SBR eligibility as part of every CT filing engagement and ensures the election is correctly made on your EmaraTax return. If you are approaching the AED 3 million threshold, we will advise you in advance.