UAE Small Business Relief Extended to 2029: What It Means for Your Business

Updated 21 September 2026. When we first published this article on 20 July, Small Business Relief was due to end with tax periods closing on 31 December 2026, and no extension had been announced. Nine days later that changed. We have rewritten the piece so it reflects the rules as they stand now.

Since June 2023, Small Business Relief has let eligible UAE companies pay 0% Corporate Tax instead of the standard rate. On 29 July 2026 the Ministry of Finance issued Ministerial Decision No. 131 of 2026, which extends the relief to tax periods ending on or before 31 December 2029. For a business on a calendar year, that is three more years of relief than most founders were planning for.

What actually changed

Only the end date. The new decision amends the original Ministerial Decision No. 73 of 2023 and leaves everything else as it was: the AED 3 million revenue threshold, the eligibility conditions, and the way you claim it. If you qualified before, you still qualify on the same terms — you simply have longer to use it.

Who qualifies

To claim relief for a tax period, you need to be a UAE resident person whose revenue has not exceeded AED 3 million in that period or in any earlier tax period since the regime began in June 2023. You also cannot be a Qualifying Free Zone Person — the free zone 0% regime and Small Business Relief are alternatives, not a combination — or part of a multinational group with consolidated global revenue above AED 3.15 billion.

The rule that catches people out

The revenue test looks backwards, not just at the current year. Cross AED 3 million in a single tax period and you lose the relief for that period and every period after it, even if revenue falls back under the line the following year. The extension does not soften that. A growing business that expects to pass AED 3 million in 2027 gets nothing from the extra years to 2029.

The FTA also looks at businesses split across several companies to keep each one under the threshold. If the split exists mainly so the relief can be claimed more than once, expect it to be challenged.

Relief is not automatic, and it is not an exemption

You elect Small Business Relief in your Corporate Tax return, for each tax period separately. Forget to elect it and you pay tax at the normal rates. Electing it does not take you out of the system either: you still need to have completed your corporate tax registration, you still keep proper records, and you still file a return by the deadline — nine months after your year end. For a 31 December 2025 year end, that is 30 September 2026.

There is also a trade-off worth weighing every year. In any period where you elect the relief, you are treated as having no taxable income, so a tax loss from that year cannot be carried forward to use later. In a year where you expect to make a loss, electing the relief can cost you more down the line than it saves now.

What to do now

If you had started planning around a 2027 cut-off, there is no need to rush — but do not throw the plan away. The reasons to keep clean, accrual-based books have not changed: the FTA can still review your records, you will need them the moment you cross AED 3 million, and a buyer, lender or investor will want them long before 2029. Relief allows you to prepare your accounts on a simplified cash basis. That does not make it the better choice for your business.

Three practical steps. Check your revenue for every tax period since June 2023, not just this one. Decide each year, on that year's numbers, whether electing relief actually saves you money. And if you are getting close to AED 3 million, plan for the year you cross it rather than discovering it at filing time.

You can see how the 0% and 9% bands would apply to your own profit, including whether Small Business Relief applies, with our corporate tax calculator. The decision itself is listed on the Ministry of Finance legislation page, and returns are filed through the EmaraTax portal.

If you would like a plain-English read on whether electing relief is the right call for your numbers — or you would rather we handled the return for you — that is exactly what we do.