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’s the main goal of an annual audit in the UAE?
The goal is to check financial records, find risks, and make sure the company follows the law.
What are PBCs, and why are they important?
PBCs are documents clients provide. They help auditors check if records are correct and speed up the process.
How should I prepare my team for the audit?
Assign tasks, train everyone on their roles, and keep all documents organized and ready.
What if the auditor finds an error during the audit?
Work with the auditor, find the cause, and provide any missing data to solve the issue.
How does Mubarak Al Ketbi (MAK) Auditing support companies in audits?
We give custom audit services, help prepare documents, answer questions, and provide detailed reports to improve your business.

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