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.

When will e-invoicing become mandatory in UAE?
E-invoicing will become mandatory by July 2026 under FTA regulations.
Can small companies delay implementation?
No. All businesses must comply. Small firms should prepare early to avoid penalties.
Why is integration important in e-invoicing?
Integration prevents duplication, saves time, and reduces invoice errors.
How can e-invoicing improve data security?
It uses encryption and secure servers, which protect financial information.
How can Mubarak Al Ketbi (MAK) Auditing help businesses?
We provide e-invoicing solutions, training, and tax compliance support, so businesses stay compliant and efficient.

Know more Our Related Services

Corporate Tax for Non-Extractive Resource Businesses UAE

Corporate Tax Rules for Non-Extractive Natural Resource Businesses in UAE Understanding Corporate Tax for Non-Extractive

Role of Accounting in Hospitality Industry

Accounting keeps every business strong. People must use accounting to record expenses, revenue, assets, liabilities,

Tax Reform Ambition Welcomed in UAE 🥇

Industry Bodies and Opposition Welcome Tax Reform Ambition Tax reform in the UAE is becoming

e-Invoicing in UAE: Key Steps and Benefits

All about e-Invoicing in UAE: One More Step Towards Digitization UAE always brings new technology

Ras Al Khaimah Company Registration & Register

Ras Al Khaimah company registration is an important process for investors who want to establish

Approved Auditors in Sharjah Publishing City (SPC)

Audit Services in Sharjah Publishing City (SPC) Sharjah Publishing City (SPC) Free Zone provides a