Small Business Relief & Their Conditions

Who can elect for the Relief?  What are the conditions? What is the Relief? Who cannot elect for the Relief?  A Qualifying Free Zone PersonA 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

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.

Our Expertise In
What is a Commercial Activities Certificate under UAE VAT law?
A Commercial Activities Certificate is a document from FTA that proves a business is VAT-registered in the UAE and helps in getting refunds for VAT paid abroad.
Who needs a Commercial Activities Certificate in the UAE?
Businesses or individuals who do cross-border transactions or pay VAT in advance in other countries need this certificate.
How do you apply for the Commercial Activities Certificate?
You apply online on the FTA portal. You register, fill the form, pay the fee, and download the certificate after approval.
What documents are required to get the certificate?
You need your VAT registration, TRN number, trade license copy, and a signed and stamped request letter.
Who can help with getting the Commercial Activities Certificate?
Mubarak Al Ketbi (MAK) Auditing helps with the whole process and offers advice on tax matters.

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