Small Business Relief (SBR) allows UAE businesses with revenue of AED 3 million or less (in the current and all prior periods) to elect 0% CT for that tax period. SBR must be elected annually on the CT return. The last eligible period ends 31 December 2026. Transfer pricing obligations still apply to SBR-elected businesses with related-party transactions.
What is Small Business Relief (SBR)?
Small Business Relief is a provision under the UAE CT Law that allows eligible businesses to elect to be treated as having no taxable income — effectively achieving a 0% effective CT rate — for a given tax period. The election is optional and must be made on the annual CT return.
SBR applies to resident taxable persons (UAE-incorporated or effectively managed entities) whose revenue does not exceed AED 3 million in the current tax period and in all prior tax periods from the CT effective date. A single period of revenue exceeding AED 3 million disqualifies SBR for that period and all future periods — even if revenue subsequently drops.
The AED 3 million threshold is based on total revenue — not taxable income or profit. Include all income: sales, service fees, interest, rent, capital gains. If your gross revenue is AED 3.1 million, you cannot elect SBR even if your taxable profit is only AED 200,000.
SBR sunsets 31 December 2026 — what this means for your business
SBR is available only for tax periods that end on or before 31 December 2026. This is a hard sunset — not expected to be extended (though the Ministry of Finance can issue future decisions).
The cut-off applies to the end of the tax period, not the filing date. Practical implications:
- Calendar-year businesses (FY ending 31 Dec 2026): eligible for SBR in FY 2026. Filing deadline: 30 September 2027. The FY 2027 period (1 Jan 2027 – 31 Dec 2027) will not qualify.
- 31 March FY end businesses: eligible for the period ending 31 March 2026. The next period (1 April 2026 – 31 March 2027) ends after 31 December 2026 and will not qualify for SBR.
- 30 June FY end businesses: eligible for the period ending 30 June 2026. The period ending 30 June 2027 will not qualify.
- 30 September FY end businesses: eligible for the period ending 30 September 2026. The period ending 30 September 2027 will not qualify.
If you are currently sheltered by SBR, your CT cost for the 2027 financial year will jump from 0% to 9% on income above AED 375,000. For a business with AED 1 million in taxable income, that is AED 56,250 in CT (9% × (AED 1M − AED 375K)). Begin modelling the impact now — pricing decisions and cost structures may need adjustment.
Transfer pricing obligations survive SBR
This is the most-overlooked SBR trap. Electing SBR does not exempt a business from UAE transfer pricing (TP) disclosure and documentation obligations. If a business has transactions with related parties — intercompany loans, management fees, shared services, royalties, or goods transfers — the arm’s-length principle applies.
A common scenario: a startup elects SBR (0% CT), has an intercompany loan from its parent at below-market rates, and receives a management fee from a related entity. An FTA review may disallow the below-market interest and recalculate the taxable profit as if the arm’s-length rate was used — potentially pushing taxable income above zero and generating a CT liability, with penalties.
If you have related-party transactions above the TP disclosure thresholds, you must file the TP Disclosure Form with your CT return — even if you elect SBR. Prepare a basic TP analysis (benchmarking study or comparable uncontrolled price) for any significant intercompany transactions to support the arm’s-length position.
How to make the SBR election
Confirm revenue eligibility
Calculate total revenue for the current period and confirm it does not exceed AED 3 million. Also confirm all prior CT periods (from 1 June 2023) had revenue ≤ AED 3 million. One prior breach = no SBR.
Confirm no QFZP election conflict
SBR is not available to QFZPs (who elect the 0% qualifying income route instead). Confirm your entity is not in a free zone or has not applied for QFZP treatment.
Make the election on EmaraTax
On the CT 300 return, there is an explicit SBR election checkbox. Tick it and retain the confirmation. The election is irrevocable for that period but must be repeated each year.
File TP Disclosure if applicable
If related-party transactions exist above the thresholds, complete the Disclosure of Related Party Transactions form. Attach transfer pricing documentation if thresholds require it.
Need SBR election review before your CT return?
We confirm eligibility, flag TP exposure, and complete the annual SBR election on your CT 300 return. Fixed scope, fixed fee.
Frequently asked questions
Who qualifies for Small Business Relief in UAE?+
Resident taxable persons with revenue of AED 3 million or less in the current tax period and all prior CT periods (from 1 June 2023 onwards). Any prior period where revenue exceeded AED 3 million permanently disqualifies SBR. Free zone QFZPs and members of Multinational Enterprise groups do not qualify.
When does UAE Small Business Relief end?+
SBR is available for tax periods ending on or before 31 December 2026. A calendar-year business can elect SBR for FY 2026 (filing by 30 September 2027) but not FY 2027. Businesses with non-December year-ends may find their last eligible period ends earlier in 2026.
Does SBR exempt me from transfer pricing rules?+
No. Transfer pricing disclosure and documentation obligations apply regardless of SBR election. Related-party transactions must still be at arm’s length. A TP adjustment can generate a CT liability even for an SBR-elected business.
Do I still need to register for CT if I qualify for SBR?+
Yes. CT registration on EmaraTax is mandatory for all UAE taxable persons regardless of revenue or profit. An SBR-eligible business must still register, file an annual CT return, and elect SBR on that return — the election is not automatic.
Can I elect SBR and later switch to the standard CT regime?+
Yes. SBR is elected annually and has no lock-in. You can elect SBR in one period and not elect it the next period (e.g., if your revenue crosses AED 3 million). But if you have a qualifying year and do not elect SBR, you simply pay standard CT — you don’t lose future eligibility.
What revenue counts toward the AED 3 million SBR threshold?+
Total revenue from all sources: sales, services, rent, interest, dividends received, and any capital gains. Gross amounts before deductions count. Revenue from exempted income (like UAE dividends) is still included in the threshold calculation even if it is excluded from taxable income.