UAE Corporate Tax Small Business Relief (SBR) Eligibility Check Guide 2026
UAE Small Business Relief (SBR) allows UAE businesses with revenue below AED 3 million to elect 0% corporate tax. Understanding eligibility and the election process protects your business from unnecessary UAE CT liability. This guide covers UAE SBR eligibility for 2026.
In this guide:
UAE SBR Eligibility Criteria
- Revenue threshold: total revenue in the tax period must be AED 3,000,000 or less (AED 3 million or less); calculated on an accrual basis; all sources of income included
- Election: SBR is not automatic; you must actively elect SBR in your UAE CT return on EmaraTax; file the return and choose SBR election
- Tax period: SBR applies per tax period; you can elect SBR in year 1 and revert to standard CT in year 2 if revenue increases
- Qualifying person: must be a UAE resident juridical person (company); natural persons (individuals) conducting business above AED 1M also check SBR; non-residents with UAE PE cannot elect SBR
Revenue Calculation for UAE SBR
- All revenue sources: include ALL income of the entity; sales revenue; service fees; rental income; interest received; dividend income from non-qualifying investments; FX gains; and any other income
- NOT excluded: revenue from group companies; passive investment income; free zone qualifying income (all included in the AED 3M threshold check)
- Multi-entity: SBR threshold applies separately to each entity; a UAE group of 3 companies each with AED 2M revenue all qualify for SBR individually; no consolidation for SBR threshold
- Part-year: if your UAE company was incorporated mid-year, the AED 3M threshold is proportional; for a 6-month tax period, the threshold is AED 1.5M
UAE SBR and Free Zone QFZP
- Can elect BOTH SBR and QFZP? No; a QFZP entity pays 0% on qualifying income and 9% on non-qualifying; an SBR entity pays 0% on everything; if your revenue is below AED 3M, SBR is simpler and equally beneficial (0% on all income regardless of qualifying/non-qualifying split)
- Recommendation: if revenue is below AED 3M, elect SBR — no need to track qualifying vs non-qualifying income
- Revenue above AED 3M: once revenue exceeds AED 3M, SBR is not available; if free zone, now must consider QFZP (0% on qualifying) vs standard (9% on all income above AED 375,000 threshold)
SBR Anti-Avoidance Rules
- Artificial splitting: UAE CT prevents artificial splitting of a business across multiple entities solely to keep each below AED 3M; if the FTA determines a business was split purely for SBR purposes, they can disregard the split and assess CT on the combined entity
- Genuine business reason: multiple UAE entities are fine if there is a genuine commercial reason (different activities, different shareholders, different markets); the key is that the structure is not SOLELY for the purpose of avoiding the AED 3M SBR threshold
- Documentation: if you have multiple UAE entities each below AED 3M, maintain documentation of the genuine commercial rationale for each separate entity