Gulf News, 21 July 2026: Tax experts in Dubai have warned that UAE companies generating under Dh3 million in annual revenue could miss out on Small Business Relief if they fail to actively select the option when filing corporate tax returns.
Speaking at the launch of the Tax Experts Club UAE, Mayank Sawhney, Managing Director of MaxGrowth Consulting and board member of the club, explained that businesses must opt for the relief during filing, even if their revenue qualifies. He gave the example of a consultancy earning Dh2.9 million in revenue and Dh2.5 million in profit, which would still qualify provided the relief is claimed correctly.
The relief was introduced to reduce the corporate tax burden on firms with revenue up to Dh3 million, regardless of profit levels. However, Sawhney cautioned that companies filing internally may overlook the election if accountants or owners are unfamiliar with the requirements. Businesses must also monitor revenue annually, as exceeding the Dh3 million threshold in one year can affect eligibility in subsequent periods.
Sawhney further noted that free‑zone status does not guarantee zero tax. Companies must demonstrate economic substance by employing sufficient staff, holding board meetings within the free zone, and operating from appropriate premises. Firms relying on minimal arrangements, such as flexi‑desks, may struggle to prove compliance. Non‑qualifying activities or failure to meet conditions could lead to audits, assessments, and penalties.
He advised companies nearing the threshold to review their structures before year‑end and seek professional guidance, stressing that any restructuring must have a genuine commercial basis rather than being solely tax‑driven.
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