The Small Business Relief UAE (SBR) is a game-changing fiscal policy designed to support startups and SMEs by effectively exempting them from the 9% corporate tax. In 2026, as the UAE completes its third year of the corporate tax regime, the SBR remains the most critical tool for business owners to maintain their profitability and reinvest in their growth. Under this relief, qualifying residents with a gross revenue below a specific threshold can elect to be treated as having “no taxable income” for a particular tax period. At Tdabeer, we help entrepreneurs navigate the complexities of tax registration and financial reporting to ensure they fully leverage the Small Business Relief UAE before the current legislative window closes.
Who Qualifies for the Small Business Relief UAE?
Eligibility for the Small Business Relief UAE is primarily based on your annual revenue. For tax periods starting on or after June 1, 2023, and ending on or before December 31, 2026, a taxable person is considered “Qualifying” if their revenue for the relevant and previous tax periods does not exceed AED 3 million. This relief applies to both individual entrepreneurs (Natural Persons) and corporate entities (Juridical Persons) that are residents of the UAE. However, it is important to note that “Qualifying Free Zone Persons” and members of large Multi-National Enterprises (MNEs) with global revenues exceeding AED 3.15 billion are excluded from this specific relief.
Benefits of Electing for Small Business Relief
By electing for the Small Business Relief UAE, your business gains several strategic advantages beyond the 0% tax rate:
- Zero Tax Liability: Pay 0% tax on all profits, provided your revenue stays under the AED 3 million ceiling.
- Simplified Compliance: You are not required to calculate “Taxable Income” or manage complex tax loss carry-forwards during the relief period.
- Exemption from Transfer Pricing: Simplified documentation requirements for transactions between related parties.
- Cash Flow Preservation: Reinvest the 9% savings directly into marketing, hiring, or technology upgrades in 2026.
Key Thresholds and Deadlines for 2026
Understanding the limits of the Small Business Relief UAE is essential to avoid accidental tax exposure:
| Metric | Threshold/Detail |
|---|---|
| Maximum Annual Revenue | AED 3,000,000 (Gross) |
| Applicable Years | Periods ending on or before Dec 31, 2026 |
| Registration Requirement | Mandatory Corporate Tax Registration (TRN) |
| Audit Requirement | Not mandatory for SBR, but records must be kept for 7 years. |
How to Apply for the Relief in 2026
Applying for the Small Business Relief UAE is not automatic; it requires a proactive “election” during your annual corporate tax filing. First, you must register for Corporate Tax through the EmaraTax portal and receive your TRN. When submitting your tax return for the 2026 period, you will select the option to claim the Small Business Relief. Tdabeer assists businesses in reviewing their financial statements to ensure that revenue is calculated correctly (including all related party transactions) to avoid surpassing the threshold, which would trigger the 9% tax on the entire profit amount.
Maintaining Compliance and Avoiding “Artificial Separation”
The Federal Tax Authority (FTA) monitors for “Artificial Separation,” where a business is split into multiple small entities just to stay under the AED 3 million threshold of the Small Business Relief UAE. In 2026, the FTA has increased its audit focus on “Business Fragmentation.” If the authorities determine that businesses are substantially the same and were split solely for tax purposes, the relief may be denied. Tdabeer’s tax consultants provide a full compliance check to ensure your corporate structure is legitimate and that your election for SBR is fully defensible in the event of an audit.
Frequently Asked Questions (FAQ)
Does revenue include VAT?
No. For the purposes of the Small Business Relief UAE, the AED 3 million threshold is based on gross revenue *excluding* Value Added Tax (VAT).
Can I carry forward losses if I use SBR?
No. If you elect for the relief, you cannot carry forward any tax losses incurred during that period to future tax years when you might be paying the 9% rate.
What happens after 2026?
The current Small Business Relief UAE is legislated for periods ending by December 31, 2026. Unless the government extends the relief, businesses will be subject to the standard 9% tax on profits exceeding AED 375,000 starting in 2027.
Optimize Your Business Finances:
Don’t Pay More Tax Than You Should!
Ensure your business qualifies for the 0% tax rate. Contact Tdabeer today for a professional tax assessment and SBR election assistance.
