🇦🇪 TAX EXEMPTION ELECTION
Small Business Relief (SBR)
Does your company make under AED 3 Million in revenue? Legally bypass the 9% Corporate Tax by having us formally elect the Small Business Relief on your behalf.
What is Small Business Relief?
Small Business Relief is a generous incentive by the UAE government to support startups and SMEs. It allows resident companies with gross revenues below AED 3 Million to elect to be treated as having ZERO taxable income. This means you owe exactly AED 0 in Corporate Tax, regardless of your profit margins.
However, this relief is not applied automatically. Businesses must maintain appropriate financial records, properly classify their revenue under FTA guidelines, and formally file a tax return electing this relief. Failure to actively claim it will default your company to standard tax rules, exposing you to the 9% rate and complex transfer pricing compliance.
Why Claim SBR?
- **Absolute 0% Tax:** Completely bypass the 9% tax on profits.
- **Simplified Compliance:** Exempt from complex transfer pricing rules.
- **Lower Costs:** Avoid the need for expensive, audited IFRS financial statements.
Pitfalls of Improper Election
Missing the deadline or miscalculating your revenue can cost you your 0% tax status.
Failing to Elect
Assuming you don't need to file because your revenue is small is a critical mistake. If you don't formally elect SBR by the filing deadline, you face standard tax laws and penalties.
Revenue Miscalculation
Incorrectly excluding certain income streams (like capital gains or side income) could push your actual revenue over AED 3M, making an SBR claim fraudulent and heavily penalized.
Freezone Conflicts
Claiming SBR restricts Freezone companies from claiming Qualifying Freezone status for the year. This requires strategic planning to choose the most beneficial path.
Our SBR Election Process
We ensure you safely and legally lock in your 0% corporate tax rate.
Revenue Assessment
Careful calculation of your gross revenue in accordance with FTA definitions to ensure it stays below AED 3M.
Strategic Advisory
Guiding Freezone entities on whether SBR or Qualifying Free Zone Person (QFZP) status is more advantageous.
Tax Registration Verification
Ensuring your TRN is active and your EmaraTax portal is prepared for the election.
Return Preparation
Drafting the simplified corporate tax return specifying the SBR election.
FTA Submission
Formally filing the election via the EmaraTax portal before the corporate tax deadline.
Documentation Advisory
Advising you on the exact bank statements and invoices to retain to defend your 0% status in an audit.
One-Time Election Fee
SMALL BUSINESS RELIEF
Flat rate for assessing revenue eligibility and filing the simplified Corporate Tax return.
How We Claim Your Relief
A fast, legally binding process to secure your tax exemption.
Provide Records
Share your business bank statements and invoices for the tax year.
Eligibility Check
We calculate total gross revenue to definitively ensure it is below the AED 3M threshold.
Strategic Review
We verify if this is the most tax-efficient route for your specific business setup.
Drafting
We draft the simplified tax return and officially elect the Small Business Relief clause.
Filing & Zero Tax
We submit the return, securing your AED 0 corporate tax liability for the year.
Frequently Asked Questions
Small Business Relief (SBR) is a special provision under the UAE Corporate Tax Law designed to reduce the compliance burden for startups and SMEs. If a resident company's gross revenue in a relevant tax period and all previous tax periods does not exceed AED 3 Million, it can elect to be treated as having no taxable income (effectively paying 0% tax).
Any UAE resident taxable person—including mainland and freezone companies—whose gross revenue (sales) is AED 3 Million or below for the tax period and previous periods, until December 31, 2026. Free Zone companies that elect to be 'Qualifying Free Zone Persons' and members of Multinational Enterprises (MNEs) are not eligible.
Yes. All UAE businesses must register for Corporate Tax and obtain a Tax Registration Number (TRN), regardless of their revenue or whether they intend to claim Small Business Relief.
Yes. Small Business Relief is not automatic. You must formally elect to apply for it by filing a simplified Corporate Tax return at the end of your financial year, declaring your revenue and confirming your election for the relief.
If your revenue exceeds AED 3 Million in any tax period, you lose eligibility for Small Business Relief for that period and all subsequent periods. You will then be subject to the standard 9% Corporate Tax on net taxable profit exceeding AED 375,000.
It is based strictly on Gross Revenue (total sales/turnover), not net profit. Even if your net profit is low, if your total gross revenue exceeds AED 3 Million, you cannot claim this relief.
Yes, a Free Zone company can claim SBR. However, doing so means you cannot simultaneously be treated as a Qualifying Free Zone Person (which offers a 0% rate indefinitely on qualifying income). SBR is temporary and simpler, while QFZP status is permanent but complex.
Currently, the UAE Ministry of Finance has stated that Small Business Relief is available for tax periods starting on or after June 1, 2023, and ending on or before December 31, 2026.
No. For any tax period where you elect for Small Business Relief, you cannot carry forward tax losses incurred in that period, nor can you carry forward net interest expenditure.
Generally, no. The FTA does not mandate audited financial statements for businesses claiming SBR. However, you must maintain proper financial records and evidence (like bank statements and invoices) to prove your revenue did not exceed AED 3 Million.
No. The Federal Tax Authority has strict General Anti-Abuse Rules (GAAR). Artificially separating a business into multiple entities solely to stay below the AED 3 Million threshold is illegal and will incur severe penalties.
Related Compliance Services
Corporate Tax Registration
Mandatory first step: Get your Corporate Tax Registration Number (TRN) to file.
Corporate Tax Return Filing
Standard CT filing for businesses exceeding the AED 3M revenue threshold.
Freezone Company Formation
Setup your company correctly to ensure you are eligible for maximum tax reliefs.
CLAIM YOUR RELIEF
Don't Overpay on Corporate Tax.
File Your SBR Election Today.
Relief is not automatic. Failing to elect for it means defaulting to a 9% tax rate. We handle the assessment and filing to legally zero your tax bill.
Professional Assessment · FTA Compliant · Fast Turnaround