UAE Small Business Relief (SBR) Guide: AED 3 Million Threshold & Election Rules (Ministerial Decision No. 73 of 2023)

When the United Arab Emirates introduced Federal Decree-Law No. 47 of 2022 on the Taxation of Corporations and Businesses, the Ministry of Finance included Article 21 (Small Business Relief) specifically to protect startups, micro-enterprises, SMEs, and growing entrepreneurs from compliance burdens.

Under Ministerial Decision No. 73 of 2023, a resident taxable person that elects for Small Business Relief is treated as having not derived any Taxable Income during the relevant tax period. You can test your exact eligibility in seconds using our UAE Corporate Tax Calculator.

Crucially, SBR applies to tax periods starting on or after June 1, 2023 and continues to apply to all subsequent tax periods that end on or before December 31, 2026. For calendar-year businesses (January 1 to December 31, 2026), FY 2026 is the final statutory window under current ministerial guidance to claim the AED 3,000,000 gross revenue relief.

To legally claim Small Business Relief for your 2026 tax return, you must meet three strict statutory conditions:

• Resident Person Status: You must be a UAE Resident Juridical Person (e.g., Mainland LLC, Civil Company, or Free Zone LLC not claiming QFZP status) or a Resident Natural Person (freelancer or sole establishment earning over AED 1M).
• Gross Revenue Cap of AED 3,000,000: Your total gross revenue (determined according to IFRS or IFRS for SMEs accounting standards, or cash basis if under AED 3M) must be AED 3,000,000 or less for the current tax period AND every previous tax period.
• Not an Excluded Entity: You cannot be a Qualifying Free Zone Person (QFZP) or a constituent company of a Multinational Enterprise Group (MNE) subject to Pillar Two rules (consolidated revenue ≥ AED 3.15 billion).

If you are operating on a freelance residency permit, also review our Freelance & Golden Visa Cost Estimator to compare annual licensing overheads against your tax thresholds.

Many Dubai business owners confuse Small Business Relief (AED 3M Revenue) with the Standard 0% Exemption Tier (AED 375,000 Net Profit). Even if you do not qualify for SBR—for example, if your revenue is AED 4.5 million—you still pay 0% tax on your first AED 375,000 of net profit, which represents a built-in statutory savings of AED 33,750 every year.

However, there is one scenario where a business with revenue under AED 3M might intentionally choose not to elect SBR: Tax Losses. If your startup had AED 1.8M in revenue but incurred a net loss of AED 600,000, electing SBR prevents you from carrying that AED 600,000 tax loss forward to offset future profits. Run both scenarios in our Corporate Tax Liability Tool and check our guide on Deductible Business Expenses in the UAE.

Article 6 of Ministerial Decision No. 73 of 2023 incorporates the General Anti-Abuse Rule (GAAR) from Article 50 of the Corporate Tax Law. If an entrepreneur splits a single AED 5,000,000 business into two separate trade licenses (each generating AED 2,500,000) without valid commercial substance solely to stay beneath the AED 3,000,000 limit, the Federal Tax Authority (FTA) will aggregate the revenues of both entities, revoke Small Business Relief, and assess back taxes plus FTA administrative penalties.

1. Obtain your Corporate Tax Registration Number (TRN) via the EmaraTax portal before your registration deadline.
2. Maintain financial records (Cash Basis accounting is permitted if revenue is ≤ AED 3,000,000) for at least 7 years.
3. Within 9 months of your financial year-end, open your Corporate Tax Return in EmaraTax and check the box: "Do you elect for Small Business Relief?" → Yes.
4. Submit the simplified return showing your total gross revenue and zero tax payable.