What happens if my revenue exceeds AED 3 million in a later year?

Article 2 – Taxable Person’s Revenue Threshold 1. For the purposes of the Small Business Relief referred to in Article 21 of the Corporate Tax Law (“Small Business Relief”), the Taxable Person’s Revenue threshold for the relevant Tax Period and previous Tax Periods shall be AED 3,000,000 (three million dirhams) for each Tax Period. 2. The threshold set out in Clause 1 of the Article shall apply to Tax Periods Ministerial Decision No. 73 of 2023 – Unofficial translation 1 commencing on or after 1 June 2023 and such threshold shall only continue to apply to subsequent Tax Periods that end before or on 31 December 2026. 3. A Taxable Person shall not be able to elect to apply the Small Business Relief if their Revenue in any relevant or previous Tax Period has exceeded the threshold set out in Clause 1 of this Article. 4. The Revenue for the purpose of this Article shall be determined in accordance with the applicable accounting standards accepted in the State.

For further details on small business relief, readers are advised to consult Ministerial Decision No. 73 of 2023 on Small Business Relief, and the Corporate Tax Guide on Small Business Relief. Example 27: Electing for small business relief Mr X operates a Business in Abu Dhabi. He is a Resident Person for Corporate Tax Purposes. His Tax Period ends on 31 December each year. To date, Mr X’s Revenue has never exceeded the small business relief threshold of AED 3,000,000 per Tax Period in any Tax Period. In the most recent Tax Period ending 31 December 2025, Mr X derived Revenue of AED 2,000,000. Mr X is eligible to benefit from small business relief as his Revenue for the 31 December 2025 Tax Period does not exceed AED 3,000,000, which is also the case for previous years’ Tax Periods. In order to benefit from the relief, he must make an election in his Tax Return. Mr X will be treated as having no Taxable Income for the 31 December 2025 Tax Period. This means that he will not have to calculate his Taxable Income, and will have no Corporate Tax liability in the Tax Period. Example 28: Carried forward unutilised Tax Losses when electing for small business relief C LLC is a UAE Resident company. In the Tax Period ending 31 December 2025, C LLC’s Revenue was AED 1,700,000. At the beginning of the Tax Period, C LLC had unutilised Tax Losses of AED 400,000. In the prior year, C LLC’s Revenue did not exceed the AED 3,000,000 relief threshold. C LLC elects for small business relief for the Tax Period ending 31 December 2025. C LLC’s carried forward Tax Losses cannot be used in this Tax Period, but can be carried forward and used in future Tax Periods in which the small business relief is not elected provided the relevant conditions are met. In the Tax Period ending 31 December 2026, C LLC sold a factory to B LLC for AED 5 million, resulting in its Revenue exceeding the AED 3 million (per Tax Period) small business relief eligibility threshold. In this case, C LLC will not be eligible for small business relief for the Tax Period Ending 31 December 2026. C LLC will need to determine its Taxable Income for the 31 December 2026 Tax Period. To the extent C LLC has a positive Taxable Income, it is able to utilise its Tax Losses General Corporate Tax Guide | Corporate Tax | CTGGCT1 88