Quick answer: Yes. Ministerial Decision No. 131 of 2026 extends UAE Small Business Relief (SBR) to tax periods ending on or before 31 December 2029. The AED 3 million revenue threshold is unchanged. Relief is not automatic: an eligible resident business must register for Corporate Tax, file a return, and elect the relief in that return. Need help assessing eligibility? See our corporate tax consultancy services in the UAE.
Last updated: October 2026. This article reflects the Ministry of Finance announcement of 7 August 2026. Always confirm details against the current legislation and official guidance.
On 7 August 2026, the UAE Ministry of Finance (MoF) announced Ministerial Decision No. 131 of 2026, extending the availability of Small Business Relief (SBR) under the UAE Corporate Tax regime to tax periods ending on or before 31 December 2029. This extension provides continued support for eligible small businesses by allowing them to benefit from simplified Corporate Tax treatment, helping reduce their tax compliance burden and administrative costs.
The AED 3 million revenue threshold remains applicable, subject to the conditions and requirements set out in the UAE Corporate Tax legislation. However, Small Business Relief is not granted automatically. Eligible businesses must assess whether they meet the qualifying criteria and elect to claim the relief in their Corporate Tax return for the relevant tax period.
Understanding the extended timeline, eligibility requirements, and election process is essential for businesses seeking to benefit from this relief and manage their UAE Corporate Tax obligations effectively.
What is Small Business Relief in the UAE?
Small Business Relief is a Corporate Tax relief for small resident businesses and start-ups. It comes from Article 21 of Federal Decree-Law No. 47 of 2022 on the Taxation of Corporations and Businesses, and was set out in Ministerial Decision No. 73 of 2023.
A qualifying business that elects the relief is treated as having no taxable income for that tax period. In practice, no Corporate Tax is payable for the period, and the business benefits from a lighter compliance load. The standard 9% rate would otherwise apply to taxable income above AED 375,000.
The relief is conditional and elective. It is not a general exemption for small companies, and it does not take a business outside the Corporate Tax system.
What Changed in 2026?
Before August 2026, SBR was due to end with tax periods ending on or before 31 December 2026. Many SMEs were planning a move to the standard 9% regime with the added compliance cost it brings.
On 7 August 2026, the MoF announced Ministerial Decision No. 131 of 2026, which amends Ministerial Decision No. 73 of 2023. The change is narrow:
- What moved: the end date, from 31 December 2026 to 31 December 2029.
- What did not move: the AED 3 million threshold and the conditions in the Corporate Tax legislation.
As reported, Article 1 of the new decision replaces Clause 2 of Article 2 of Ministerial Decision No. 73 of 2023. The threshold applies to tax periods beginning on or after 1 June 2023 and continues to apply to later tax periods that end on or before 31 December 2029.
Small Business Relief Extended Until 2029
| Item | Position |
|---|---|
| Legal instrument | Ministerial Decision No. 131 of 2026 |
| Amends | Ministerial Decision No. 73 of 2023 |
| Announced | 7 August 2026 |
| Relief available for | Tax periods ending on or before 31 December 2029 |
| Revenue threshold | AED 3 million |
| Previous end date | Tax periods ending on or before 31 December 2026 |
How the date works: The cut-off is tied to when the tax period ends, not when it begins. A business with a January to December year can claim for periods ending 31 December 2026, 2027, 2028 and 2029, if it qualifies each year. A business with a non-calendar year should check that each period ends on or before 31 December 2029.
Who is Eligible?
Eligibility is tested separately from the threshold. In broad terms, a business must meet all of the following for the tax period in question:
- Be a resident person. Non-resident persons cannot use SBR.
- Stay within the revenue limit. Revenue must not exceed AED 3 million for the relevant tax period and previous tax periods (counted from periods starting on or after 1 June 2023).
- Not be excluded. See the exclusions below.
- Elect for relief. The election is made in the Corporate Tax return for that period.
A business must also be registered for Corporate Tax and file a return, even when it elects relief. Eligibility is reassessed each period, so a business that qualified last year may not qualify this year.
Is the AED 3 Million Threshold Still Applicable?
Yes. The MoF announcement confirms that eligible taxable persons with annual revenue not exceeding AED 3 million can claim the relief, subject to the conditions in the Corporate Tax legislation. Ministerial Decision No. 131 changes the end date only.
Practical points:
- It is a revenue test, not a profit test. A business with AED 2.8 million in revenue and a loss is tested on revenue.
- Do not confuse it with the AED 375,000 zero-rate band of the standard regime.
- Measure revenue carefully. Check how revenue is defined under the Corporate Tax rules. Do not rely on VAT turnover figures alone.
- Track it every period. Once revenue exceeds the threshold, the business cannot elect SBR for that period, and later periods need to be checked against the legislation.
Who Cannot Claim Small Business Relief?
- Qualifying Free Zone Persons (QFZPs). The two regimes (the Qualifying Free Zone Person tax regime and Small Business Relief) are mutually exclusive. A free zone company that is not a QFZP is assessed under the general rules.
- Members of large multinational enterprise (MNE) groups that meet the large-group consolidated revenue threshold. Check the legislation for the exact test.
- Non-resident persons.
- Businesses whose revenue exceeds AED 3 million in the relevant or a previous tax period.
Group structures, common ownership, and changes in activities should also be reviewed before electing.
How to Elect for Small Business Relief?
SBR is not automatic. A business that meets the criteria must still make a positive election.
- Register for Corporate Tax with the FTA through EmaraTax, if not already registered. Our corporate tax registration service covers the full process.
- Confirm eligibility for the period: residency, revenue, and exclusions.
- Prepare accurate financial records supporting revenue and expenses.
- File the Corporate Tax return within nine months of the end of the tax period.
- Make the election in the return.
- Keep records for the period required under the legislation.
If the election is not made, the business may be taxed under the standard regime for that period. Late registration and late filing can attract penalties whether or not relief applies.
Small Business Relief vs 9% Corporate Tax
| Key Point | Small Business Relief | Standard 9% regime |
|---|---|---|
| Tax payable | None for the elected period | 9% on taxable income above AED 375,000 |
| Revenue condition | AED 3 million or less | No revenue cap |
| Election required | Yes, in the return | Not applicable |
| Registration and filing | Still required | Required |
| Record keeping | Still required | Required |
| Tax losses | Review carefully: relief periods may affect loss use | Generally carried forward, subject to the rules |
| Free zone / MNE members | Not available to QFZPs and certain MNE members | Applies as per regime |
SBR is not simply “tax-free status”. Electing the relief does not remove a business from the Corporate Tax system. Registration, return filing, and record keeping continue. There can also be a trade-off: a start-up expecting losses may prefer to keep them available for future use rather than elect relief. Model the decision period by period.
Before electing, ask:
- Will we have losses that could be valuable in later years?
- Is revenue likely to cross AED 3 million in the next two or three periods?
- Do investors, lenders, or customers need to see a full Corporate Tax position?
- Do related parties or a group structure affect eligibility?
Examples of Businesses That May Qualify
Illustrative only, with hypothetical figures. Eligibility depends on the facts and the legislation.
Example 1: Mainland consultancy. A resident consultancy earns AED 1.9 million, is not in an MNE group and is not a QFZP. It may be able to elect SBR and file a return with no Corporate Tax payable.
Example 2: E-commerce start-up. A start-up earns AED 1.1 million in year one and AED 2.4 million in year two. Revenue is within AED 3 million each period, so it may qualify, but it should weigh relief against preserving losses.
Example 3: Growing retailer. A retailer earns AED 2.7 million one year and AED 3.4 million the next. It may qualify for the first year but not the second.
Example 4: Free zone company. A QFZP cannot elect SBR and is assessed under the QFZP rules.
Example 5: Subsidiary of a large multinational. A small UAE entity in a very large MNE group may be excluded even if its own revenue is below AED 3 million.
Common SBR Mistakes
- Assuming relief is automatic.
- Skipping registration or filing.
- Confusing revenue with profit.
- Ignoring revenue in earlier periods since 1 June 2023.
- Forgetting the exclusions (QFZPs, certain MNE members).
- Not reviewing group and ownership changes.
- Overlooking loss planning.
- Relying on outdated guidance that says SBR ends in 2026.
- Keeping weak revenue records. Reliable accounting and bookkeeping makes the revenue test far easier to evidence.
- Treating the extension as permanent. It now runs to periods ending on or before 31 December 2029.
Need Help With UAE Corporate Tax?
FAR (Farahat & Co.) supports UAE businesses at every stage of their Corporate Tax journey, from initial registration and return filing to assessing eligibility for Small Business Relief (SBR) and providing guidance on the election process.
Our team helps businesses understand the applicable requirements, evaluate whether they meet the eligibility criteria, and make informed decisions based on their financial position and tax obligations. If you are unsure whether your business qualifies for Small Business Relief or whether electing to use the relief is the right choice for your circumstances, speak to FAR’s Corporate Tax team for tailored guidance and support with your compliance requirements.
Frequently Asked Questions
Is UAE Small Business Relief extended to 2029?
Yes. Ministerial Decision No. 131 of 2026, announced on 7 August 2026, extends SBR to tax periods ending on or before 31 December 2029.
Is the AED 3 million threshold still the same?
Yes. It continues to apply, subject to the Corporate Tax legislation. The decision changes the end date.
Is Small Business Relief applied automatically?
No. Eligible businesses must elect for it in their Corporate Tax return.
Do I still need to register for Corporate Tax if I use the relief?
Yes. Registration, filing, and record keeping continue to apply.
Can a free zone company claim Small Business Relief?
Not if it is a Qualifying Free Zone Person. Other free zone businesses should have their position reviewed.
What happens if my revenue goes above AED 3 million?
You cannot elect SBR for that period, and later periods should be reviewed. The 9% regime applies to taxable income above AED 375,000.
Does the 2026 end date still apply?
No. It is replaced by 31 December 2029.
Should I elect every year?
Not necessarily. It depends on expected revenue, losses, group structure, and commercial needs. Review it each period.
Sources and Official References
- UAE Ministry of Finance announcement of Ministerial Decision No. 131 of 2026, 7 August 2026, as reported by WAM: Ministry of Finance extends Small Business Relief for corporate tax until December 31, 2029
- Federal Decree-Law No. 47 of 2022 on the Taxation of Corporations and Businesses (Article 21)
- Ministerial Decision No. 73 of 2023, as amended by Ministerial Decision No. 131 of 2026
- Federal Tax Authority (FTA) Corporate Tax guidance and the EmaraTax portal
Disclaimer: This content is provided for general informational purposes only and does not constitute tax or legal advice. Eligibility for Small Business Relief depends on your specific facts and the applicable legislation. Please consult a qualified tax adviser before making an election.
