UAE Small Business Relief (SBR): Who Qualifies, How to Claim, and the Extension to 2029

Small Business Relief (SBR) lets a UAE business with revenue of AED 3 million or less be treated as having no taxable income, so it pays no corporate tax and files a simplified return. In August 2026 the Ministry of Finance extended the relief to tax periods ending on or before 31 December 2029.

Not sure you qualify for SBR? Our corporate tax consultants review eligibility as part of your return.

This guide explains who qualifies, how to claim it, what you give up by electing it and how the 2029 extension affects your planning.

What Is Small Business Relief?

Small Business Relief is an election under Article 21 of the Corporate Tax Law and Ministerial Decision No. 73 of 2023. A resident person whose revenue is within the threshold can elect, in its corporate tax return, to be treated as having no taxable income for that tax period.

It is not an exemption from the system. You still have to register for corporate tax, keep records and file a return for every tax period, choosing SBR in the return each time.

What Changed in 2026? SBR Extended to 2029

Ministerial Decision No. 131 of 2026, issued on 7 August 2026, amended Ministerial Decision No. 73 of 2023:

	Before	After
Last tax period that can use SBR	Ending on or before 31 December 2026	Ending on or before 31 December 2029
Revenue threshold	AED 3 million	AED 3 million (unchanged)
Conditions and exclusions	As in MD 73 of 2023	Unchanged

For a business with a calendar-year financial year, SBR can now be claimed for 2023 to 2029, provided the conditions are met every year.

Who Is Eligible for Small Business Relief?

A business can elect SBR for a tax period if:

• it is a resident person: a UAE company, or an individual running a business in the UAE;
• its revenue is AED 3 million or less in that tax period and in every previous tax period; and
• the tax period ends on or before 31 December 2029.

Revenue means gross revenue under the accounting standards you apply, before deducting expenses.

Who Cannot Claim Small Business Relief?

• Qualifying Free Zone Persons (QFZPs): a free zone company cannot combine the 0% QFZP regime with SBR.
• Members of large multinational groups: entities in a group with consolidated revenue above AED 3.15 billion.
• Any business that has exceeded AED 3 million in a previous tax period: once the threshold is crossed, SBR is lost for that period and every later one, even if revenue falls again.
• Artificially separated businesses: the FTA can deny SBR where a business has been split into smaller entities to stay under the threshold.

How Much Tax Does Small Business Relief Save?

	Without SBR	With SBR
Revenue	AED 2,800,000	AED 2,800,000
Taxable income	AED 600,000	Treated as nil
Tax at 0% on first AED 375,000	AED 0	–
Tax at 9% on AED 225,000 above that	AED 20,250	–
Corporate tax payable	AED 20,250	AED 0

For a profitable small business, the saving can be significant. For a loss-making one, SBR can cost more than it saves, as the next section explains.

What Do You Give Up by Electing SBR?

SBR is not always the right choice. While you claim it:

• Tax losses incurred in SBR periods cannot be carried forward to reduce tax in later years.
• Disallowed net interest expenditure in SBR periods cannot be carried forward either.
• You cannot be a QFZP at the same time.

Expert tip: if you expect losses now and profits above AED 375,000 later, compare both options before you file. Carrying the losses forward can save more tax in later years than SBR saves today.

What Are the Compliance Benefits of SBR?

• A simplified corporate tax return.
• No transfer pricing documentation requirements, such as a master file or local file.
• Businesses with revenue up to AED 3 million can prepare financial statements on the cash basis of accounting, under Ministerial Decision No. 114 of 2023.

You must still keep proper records for seven years and meet the filing deadline of nine months after the end of each tax period. Late registration and late filing penalties still apply.

How Do You Claim Small Business Relief?

1. Register for corporate tax on EmaraTax, if you have not already.
2. Check revenue for the current and all previous tax periods against AED 3 million.
3. Confirm you are not excluded: not a QFZP and not part of a large multinational group.
4. Weigh up losses you would forfeit by electing.
5. Elect SBR in the corporate tax return for the tax period, within nine months of the period end.
6. Repeat each year: the election is made period by period.

What Happens When Your Revenue Exceeds AED 3 Million?

If revenue goes above AED 3 million in any tax period, SBR is not available for that period or any later period. The business then calculates taxable income normally: 0% on the first AED 375,000 and 9% above, may need transfer pricing documentation, and from AED 50 million revenue must have audited accounts. Plan for this early if your business is growing quickly.

Need Help With Small Business Relief?

SGA World checks your eligibility, compares SBR with normal taxation including the value of any losses, and files your corporate tax return. See our corporate tax services or contact us to review your position before your next filing deadline.

To see how small business relief compares with paying tax at the standard rates, try our free UAE corporate tax and VAT calculator.