FTA Small Business Relief Guide (CTGSBR1), August 2023

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Example 10: Carried forward unutilised Tax Losses Mr X is a Resident Person. In the Tax Period ending 31 December 2024, his Revenue was AED 2,500,000. Mr X did not elect for Small Business Relief and had a Tax Loss of AED 400,000 to carry forward. In the Tax Period ending 31 December 2025, Mr X’s Revenue was AED 1,700,000. Mr X elects for Small Business Relief for the Tax Period ending 31 December 2025. His carried forward Tax Losses of AED 400,000 cannot be used in this Tax Period, but will be carried forward and can be used in future Tax Periods (provided the relevant conditions are met).

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Example 11: Tax Losses ABC LLC is a Resident Person that started trading on 1 January 2025. In the Tax Period ending 31 December 2025, ABC LLC had Revenue of AED 2,500,000 and expenses and costs of AED 3,500,000. This resulted in ABC LLC having a negative Taxable Income (i.e. a Tax Loss) of AED 1,000,000 for the 31 December 2025 Tax Period. As a Resident Person whose Revenue does not exceed AED 3,000,000, ABC LLC is eligible to elect for Small Business Relief. If ABC LLC elects for Small Business Relief, it will be treated as having no Taxable Income and benefit from simplified compliance requirements. Electing for Small Business Relief means that the Tax Loss incurred will not be declared to the FTA and cannot be carried forward to future Tax Periods. If ABC LLC chooses not to elect for Small Business Relief, it will be able to declare its Tax Loss to the FTA and the Tax Loss can be carried forward to be utilised in future Tax Periods. However, in order to do this, ABC LLC would have to comply with ordinary Corporate Tax compliance requirements, including calculating Taxable Income and completing a full Tax Return.

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Example 3: Revenue in previous Tax Periods Ms Y operates a Business in Sharjah. She is a Resident Person for Corporate Tax purposes. Her Tax Period ends on 31 December each year. In the most recent Tax Period ending 31 December 2026, Ms Y derived Revenue of AED 1,900,000. In the previous Tax Period ending 31 December 2025, she had Revenue of AED 4,300,000. Ms Y is not eligible to benefit from Small Business Relief for the Tax Period ending 31 December 2026 as her Revenue has exceeded the threshold of AED 3,000,000 in a prior Tax Period.

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Example 7: Calculation of Revenue ABC LLC is a UAE Resident Person. During its most recent Tax Period, ABC LLC made sales of AED 1,500,000 and received AED 1,000,000 of dividends from UAE companies. It had operating expenses of AED 2,000,000. ABC LLC therefore has Revenue of AED 2,500,000, costs of AED 2,000,000 and a profit of AED 500,000. However, the costs and profit are not relevant for the purposes of assessing whether ABC LLC is eligible for Small Business Relief. ABC LLC will be eligible because its Revenue is below the threshold of AED 3,000,000.

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Example 9: Resident Person anticipates exceeding the Revenue threshold ABC LLC is a Resident Person for Corporate Tax purposes. ABC LLC has been conducting Business for a number of years but has never generated Revenue of more than AED 2,000,000. ABC LLC elected for Small Business Relief for the Tax Period ending 31 December 2024. At the beginning of 2025, one of ABC LLC’s competitors ceased trading suddenly and ABC LLC experienced a huge increase in sales as a result. ABC LLC now forecasts that for the Tax Period ending on 31 December 2025, it will have Revenue of more than AED 5,000,000. ABC LLC does not need to do anything different immediately. However, if its Revenue for the 31 December 2025 Tax Period does exceed AED 3,000,000, it will no longer be eligible for Small Business Relief. It will have to calculate and pay Corporate Tax on its Taxable Income. In this regard, ABC LLC will need to consider all the relevant provisions of the Corporate Tax Law, including any reliefs which might be applicable.