Small Business Relief & Their Conditions

Who can elect for the Relief? 

  • Resident Person (natural persons and juridical persons)

What are the conditions?

  • Election for each Tax Period.
  • Revenue equal to or less than AED 3,000,000 in both the current and all previous Tax Periods

What is the Relief?

  • Treated as not having derived any Taxable Income in the Tax Period
  • Other exemptions, reliefs and deductions are not available
  • No transfer pricing documentation required,  however, still needs to comply with the arm’s length principle 

Who cannot elect for the Relief? 

A Qualifying Free Zone Person
A member of a multinational group
 with consolidated group revenue of more than AED 3.15 billion

The small business relief is not available for MNE group of companies that are operating other country than UAE and there consolidated revenue are more than AED 3.15 billion. The MNE companies are required to prepare the Country-by-Country Reports as issued Cabinet Resolution No. 44 of 2020 on Organizing Reports Submitted by Multinational Companies.

Who will be party of MNE group:

  • The separate business that is part of preparing the consolidated financial statements
  • The separate business that is excluded during preparing the consolidated financial statements based on size or materiality grounds.
  • If business prepare separate financial statements for the permanent establishment (PE) If any company falls under the above mentioned and even revenue is below equal to or below AED 3,000,000 for the relevant Tax Period and all previous Tax Periods. The company is not eligible for small business relief.

Example: Revenue in previous Tax Periods

Mr. Y operates a Business in Sharjah. He is a UAE Resident Person for Corporate Tax purposes. His Tax Period ends on 31 December each year.

In the most recent Tax Period ending 31 December 2026, Mr. Y derived Revenue of AED 1,900,000. In the previous Tax Period ending 31 December 2025, he had Revenue of AED 4,300,000.

Mr. Y is not eligible to benefit from Small Business Relief for the Tax Period ending 31 December 2026 as his Revenue has exceeded the threshold of AED 3,000,000 in the prior Tax Period.

What is Ras Al Khaimah Free Trade Zone (RAK FTZ)?
It’s a UAE free zone offering 100 % foreign ownership, tax-free incentives, and easy business setup procedures.
Why do businesses need approved auditors in RAK FTZ?
Approved auditors ensure transparency, compliance, and accurate financial reporting.
What licenses are available in RAK FTZ?
Industrial, Commercial, General Trading, Consultancy, and Professional licenses.
Why choose Mubarak Al Ketbi (MAK) Auditing for RAK FTZ?
They’re approved auditors offering reliable, compliant, and expert financial auditing services.
How long does it take to start a business in RAK FTZ?
Most licenses are issued within a few working days after documentation approval.

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