The SBR Revenue Formula
(UAE + Foreign + Exempt Income)
Must be ≤ AED 3,000,000
Revenue for Small Business Relief is not just your UAE sales. It's your total gross business income calculated on a worldwide basis under IFRS — including income types you might assume don't count. If this total exceeds AED 3 million in the current or prior tax period, SBR is not available.
What COUNTS as Revenue — The Full List
| Income Type | Counts Toward AED 3M? | Notes |
|---|---|---|
| UAE domestic sales | ✅ Yes | All sales to UAE customers — goods and services |
| Export sales | ✅ Yes | Sales to customers outside the UAE — zero-rated or out-of-scope for VAT, but still revenue |
| Exempt income (Art 22 dividends) | ✅ Yes | Dividends from UAE subsidiaries are CT-exempt but still count toward the SBR threshold |
| Interest income | ✅ Yes | Bank interest, loan interest, inter-company interest — all count |
| Rental income | ✅ Yes | Income from property rentals |
| Foreign income | ✅ Yes | Revenue from foreign operations, overseas clients, or foreign PE — worldwide basis |
| Other business income | ✅ Yes | Commission, royalties, management fees, IP licensing, any other income |
| Capital gains on asset disposals | ✅ Yes | If recognised as income under IFRS |
| VAT collected | ❌ No | VAT is recoverable — it's the FTA's money, not yours. Exclude from revenue. |
This catches many businesses: dividends from UAE companies are exempt from corporate tax under Article 22 — you don't pay 9% on them. But they still count toward the AED 3 million SBR revenue threshold. A company with AED 1 million in trading income + AED 2.5 million in exempt dividends has AED 3.5 million in SBR revenue — and loses SBR eligibility. The dividend itself isn't taxed, but it makes all your other income taxable at 9%.
Revenue Is Calculated Under IFRS
The AED 3 million threshold is based on revenue as determined under IFRS (International Financial Reporting Standards) — specifically IFRS 15 for revenue from contracts with customers. This means:
Accrual basis, not cash basis. Revenue is recognised when earned (when the performance obligation is satisfied), not when cash is received. If you invoiced AED 2.8 million but only collected AED 2 million, your revenue is AED 2.8 million for SBR purposes.
Net of VAT. Since VAT is collected on behalf of the FTA and is recoverable, it's excluded from revenue. Your IFRS revenue is the pre-VAT amount.
Gross, not net. Revenue is your top-line figure — before deducting cost of sales, expenses, or any other deductions. Don't confuse revenue with profit.
💡 Common mistake: "My profit is only AED 200,000 so I qualify for SBR." Wrong. SBR looks at revenue (top line), not profit (bottom line). A company with AED 4 million revenue and AED 200,000 profit does NOT qualify for SBR.
Revenue Is Worldwide — Not UAE Only
If your UAE company has income from overseas — foreign clients, overseas branches, foreign investments — that income counts toward the AED 3 million threshold. The calculation is on a worldwide basis.
Example: A Dubai consulting company earns AED 2 million from UAE clients and AED 1.5 million from Saudi clients. Total worldwide revenue: AED 3.5 million. SBR not available — even though UAE-source revenue alone was under AED 3 million.
What About VAT — Is It Included?
No. VAT collected from customers is excluded from revenue. It's a pass-through tax — you collect it from customers and remit it to the FTA. It was never your income.
Example: You invoice AED 3,150,000 (AED 3,000,000 + 5% VAT of AED 150,000). Your revenue for SBR purposes is AED 3,000,000 — exactly at the threshold. You still qualify for SBR.
But if you invoice AED 3,160,000 (AED 3,009,524 + VAT), your pre-VAT revenue is AED 3,009,524 — over the threshold. SBR not available.
Not Sure If You Qualify for SBR? We'll Check
CT filing from AED 249 (SBR) or AED 499 (non-SBR). We verify your revenue against the threshold before filing.
Worked Example
A UAE free zone company has the following income for FY 2025:
| Income Type | Amount (AED) | Counts for SBR? |
|---|---|---|
| UAE consulting fees | 1,800,000 | ✅ Yes |
| Export consulting fees (Saudi client) | 600,000 | ✅ Yes |
| Exempt dividends from UAE subsidiary | 400,000 | ✅ Yes |
| Bank interest income | 25,000 | ✅ Yes |
| VAT collected | 90,000 | ❌ No |
| SBR Revenue Total | 2,825,000 | ✅ Under AED 3M — SBR eligible |
Remove the exempt dividends and the company is well under. But add them in (as required), and they're at AED 2,825,000. Still eligible — but watch the trend.
The Prior Period Rule — Don't Forget
SBR eligibility isn't just about the current period. If revenue exceeded AED 3 million in any prior tax period, SBR is not available in the current period — even if current revenue dropped below AED 3 million. Read our detailed guide: SBR Prior Period Revenue Rule →
Losses Under SBR Are Wasted
One more critical point: if you elect SBR, your taxable income is deemed zero — which means any tax losses for that period are also zero. You can't carry forward losses from an SBR period. If your company has genuine losses that could offset future taxable income, electing SBR may not be the best strategy. Talk to Fastlane about your CT filing options →
Written & Reviewed by Nithin — FTA-Registered Tax Agent (TRN: 104218042400003)
Based on UAE Federal Decree-Law No. 47/2022, Ministerial Decision No. 73/2023 on Small Business Relief, and IFRS 15 revenue recognition standards. Revenue definition for SBR includes all gross income on a worldwide basis including exempt income.