**Small Business Relief (SBR)** is a simplified tax treatment under **Article 21** of the Corporate Tax Law. It allows eligible UAE Resident Persons to be treated as having "No Taxable Income," effectively applying a 0% tax rate regardless of profit margins, provided gross revenue remains within the statutory ceiling.
The AED 3 Million Revenue Ceiling
Per **Ministerial Decision No. 73 of 2023**, the threshold for SBR is set at **AED 3,000,000** in gross revenue. For the 2026 tax period, the FTA applies two critical "Integrity Tests" to this threshold:
The Historical Clean-Sheet
To elect SBR in 2026, your revenue must not have exceeded AED 3M in the current period **AND** all previous tax periods starting from June 1, 2023. A single breach in 2024 or 2025 results in permanent disqualification.
Artificial Separation Risk
The FTA actively monitors for "Business Splitting." If a single commercial activity is divided into multiple licenses to keep each under AED 3M, the relief will be denied under **General Anti-Abuse Rules (GAAR)**.
The 2026 'SBR Trap': Losses and Interest
Electing for SBR is a double-edged sword. While it eliminates tax, it also **extinguishes tax benefits**. Entities electing SBR for the 2026 period:
- Cannot carry forward **Tax Losses** incurred during the SBR period.
- Cannot deduct **Net Interest Expenditure** or carry it forward.
- Must still comply with **Arm's Length Principles** for all related party transactions.
Who is Excluded?
Even if revenue is below AED 3M, SBR is strictly unavailable to:
- Multinational Enterprise (MNE) Groups
- Qualifying Free Zone Persons (QFZP)
"SBR expires on December 31, 2026. For businesses approaching the threshold, the decision to elect SBR must be weighted against the value of carrying forward setup-year losses into 2027 and beyond."
— Arakan Statutory Intelligence Brief