UAE Small Business Relief Extended to 2029: What Businesses Need to Know

On 7 August 2026 the UAE Ministry of Finance announced Ministerial Decision No. 131 of 2026, which amends Ministerial Decision No. 73 of 2023 on Small Business Relief. The decision was issued on 29 July 2026 and takes effect the day after publication.

The change itself is short. Small Business Relief was originally scheduled to stop applying to tax periods ending after 31 December 2026. It now applies to tax periods ending on or before 31 December 2029.

That is the whole amendment. The AED 3 million revenue threshold has not moved. The eligibility conditions have not been loosened. Nothing about Corporate Tax registration, return filing or record keeping has been relaxed.

Worth stressing, because some of the coverage has been read as “small businesses in the UAE do not pay Corporate Tax until 2029.” That is not what happened, and acting on that reading is how businesses end up with a filing problem. Eligible businesses now have three more years of tax periods in which they can claim a relief they still have to qualify for and still have to elect.

What is Small Business Relief in the UAE?

Small Business Relief is a measure under the UAE Corporate Tax regime that lets an eligible resident taxable person be treated as having no taxable income for a tax period.

The point of it is compliance cost, not revenue collection. The Ministry introduced it so smaller companies and start-ups would not carry the full weight of Corporate Tax computation in the early years of the regime. A business that elects files a simplified return rather than a full taxable income calculation, and is not required to prepare transfer pricing documentation, though it still has to observe the arm’s length principle with related parties.

What the relief does not do is remove the business from the Corporate Tax system. The FTA is explicit that a person electing for Small Business Relief remains a taxable person under the Corporate Tax Law, which means registration, filing and record keeping all carry on as normal.

There is also a cost that is easy to miss. Under Ministerial Decision No. 73 of 2023, a business that elects for the relief in a tax period cannot carry forward tax losses or net interest expenditure from that period. For a company sitting on genuine losses, the relief is not automatically the better outcome, and that is worth calculating before you tick the box.

What changed under Ministerial Decision No. 131 of 2026?

The decision amends Clause 2 of Article 2 of the 2023 decision. In the original wording, the AED 3 million threshold applied to tax periods commencing on or after 1 June 2023 and continued to apply only to subsequent tax periods ending on or before 31 December 2026. The 2026 decision replaces that end date with 31 December 2029.

Item	Previous position	Updated position
Small Business Relief end date	Tax periods ending on or before 31 Dec 2026	Tax periods ending on or before 31 Dec 2029
Revenue threshold	AED 3 million	AED 3 million
Main change	Relief scheduled to end sooner	Relief period extended by three years
Corporate Tax registration	Still required	Still required
Election for relief	Required in the tax return	Required in the tax return
Excluded persons	QFZPs and large MNE group members	Unchanged

The distinction that matters here is between an extension of the relief period and an increase in the eligibility threshold. This was an extension. A business with AED 4 million in revenue was outside the relief before August 2026 and is outside it now.

Does the AED 3 million revenue threshold still apply?

Yes, and it is unchanged.

The threshold measures revenue, meaning gross income for the tax period before deducting costs. It is not profit and it is not taxable income. A consultancy billing AED 3.4 million on AED 700,000 of profit is over the threshold, modest profit notwithstanding.

A second condition attached to the threshold gets far less attention than it deserves. Revenue has to have stayed at or below AED 3 million in the relevant tax period and in every previous tax period within the relief window. Cross the line once and you do not simply lose the relief for that year, you lose access to it for the tax periods that follow, even if revenue drops back afterwards.

An example, with the assumptions stated plainly. A Dubai mainland company on a calendar tax period reports AED 2.6 million of revenue in 2025 and AED 2.9 million in 2026, and elects for the relief in both years. In 2027 it wins a large contract and revenue reaches AED 3.4 million, so it cannot claim the relief for 2027. If revenue falls back to AED 2.5 million in 2028, the relief is still unavailable, because the test looks at previous tax periods as well as the current one. This assumes a resident taxable person that is not a Qualifying Free Zone Person and not part of a large multinational group.

Crossing AED 3 million, in other words, is not a one-year event.

Who can benefit from UAE Small Business Relief?

Eligibility turns on more than the revenue figure. A resident taxable person may qualify where all of the following hold:

• Revenue for the relevant tax period is AED 3 million or less, and was AED 3 million or less in each previous tax period in the relief window
• The tax period commenced on or after 1 June 2023 and ends on or before 31 December 2029
• The business is not a Qualifying Free Zone Person
• The business is not a constituent company of a multinational enterprise group with consolidated group revenue above AED 3.15 billion
• The business is registered for Corporate Tax and files its return for the period
• The election is made in that return
• Supporting records are retained

Free zone companies sit in an awkward spot here. A free zone company that is a Qualifying Free Zone Person cannot claim Small Business Relief. One that is not a QFZP, and meets the other conditions, may be able to. Which of those describes your entity depends on your income streams and substance position, so it is not answerable from the licence type alone.

The list above is where the eligibility assessment starts, not where it ends.

Is Small Business Relief automatic?

No. This is the point most worth taking away from the announcement.

The FTA’s guidance is direct: an eligible person must make an election in their tax return to benefit from Small Business Relief. There is no automatic application, no default setting and no assumption made on your behalf. A business with AED 900,000 of revenue that registers for Corporate Tax, files its return and forgets to make the election has not claimed the relief.

The election is also made per tax period. Electing in 2026 does not carry the relief into 2027; you review the position and elect again.

The practical sequence: confirm eligibility against the current and prior periods, complete Corporate Tax registration and filing properly, make the election in the return, and keep the records supporting the revenue figure you relied on. Skip any of those and the relief either fails or becomes hard to defend if the FTA asks.

What does the 2029 extension mean for UAE SMEs?

More qualifying periods. For a company on a calendar year, the extension adds three filing years in which the relief can be claimed.

A longer planning horizon. Decisions about taking on a large contract, restructuring, or investing in finance systems can now be made against a known position through 2029 rather than a cliff edge at the end of this year.

Accounting records matter just as much. The relief is claimed on a revenue figure that has to come from somewhere defensible. Businesses under AED 3 million may prepare financial statements on a cash basis, which helps, but the records still need to hold up.

No compliance holiday. Registration, filing and the seven year record retention requirement all continue. The extension changed a date in one clause.

Revenue tracking gets more important, not less. A business trending toward AED 3 million now has more years in which an unnoticed crossing can cost the relief permanently.

Small Business Relief vs the 0% rate on AED 375,000

These two numbers get confused constantly, and they measure completely different things.

	AED 3,000,000	AED 375,000
What it measures	Revenue (gross income)	Taxable income (profit after adjustments)
What it relates to	Small Business Relief eligibility	The Corporate Tax rate structure
Effect	Eligible electing business treated as having no taxable income for the period	0% applies to taxable income up to this amount, 9% above it
Requires an election	Yes	No, it is part of the rate structure
Time limited	Yes, tax periods ending on or before 31 Dec 2029	No

The AED 375,000 band is not a relief you claim. It is how the rate works, and it applies whether or not you elect for anything. Small Business Relief is a separate measure with its own conditions, its own election and its own end date.

What businesses should do now

Two things deserve emphasis before the checklist. Track revenue monthly rather than at year end, because discovering in month eleven that you crossed the threshold in month four leaves you no options. And keep books that reconcile as you go: audit-ready records turn filing season into a review rather than a reconstruction.

Corporate Tax returns are generally due within nine months of the end of the relevant tax period, so work backwards from your own year end.

Small Business Relief checklist

• Revenue for the current tax period is AED 3 million or less
• Revenue in every prior tax period in the relief window was also AED 3 million or less
• Tax period ends on or before 31 December 2029
• Entity is a resident taxable person, not a Qualifying Free Zone Person
• Entity is not in an MNE group above AED 3.15 billion consolidated revenue
• Corporate Tax registration is complete
• Accounting records support the revenue figure
• Loss and interest carry forward consequences have been weighed
• Election made in the Corporate Tax return for this period
• Records retained for seven years after the end of the tax period

Common mistakes to avoid

• Assuming the relief applies by itself. Without the election in the return, there is no relief.
• Reading revenue as profit. A low margin trading business can be well over AED 3 million on very ordinary profits.
• Mixing up AED 3 million and AED 375,000. One is a revenue test for a relief you elect, the other is a rate band that applies on its own.
• Skipping registration or filing. Both obligations sit outside the relief entirely, and a business that never files has claimed nothing.
• Weak bookkeeping. If you cannot evidence the revenue figure, you cannot defend the election.
• Only checking revenue at year end. By then the threshold has either been crossed or it has not.
• Assuming every business under AED 3 million qualifies. QFZPs and large group members do not, whatever their revenue.
• Discarding records early. They are retained for seven years after the end of the tax period.
• Electing without checking losses. If the period generated a loss you would otherwise carry forward, electing may cost more than it saves.
• Treating 2029 as permanent. It is a date in a decision, and it has already been changed once.

How proper accounting helps with Small Business Relief

Bookkeeping does not make a business eligible. Eligibility comes from the legislation and from your facts. What good records do is let you establish your position accurately and support it afterwards.

Accurate accounting gives you a revenue figure you can rely on rather than estimate, a running view of where you sit against the threshold during the year, a clean basis for the Corporate Tax computation whether or not you elect, and documentation that holds up if the FTA queries the return.

The businesses that struggle with this are rarely the ones that fail the conditions. They are the ones that cannot tell, in October, what their revenue actually is. Consistent accounting and bookkeeping support removes that particular problem.

How Aurum can help with UAE Corporate Tax compliance

Aurum Accelerator works with businesses across Dubai and the wider UAE on the compliance side of running a company here. That covers transaction recording and monthly reconciliations, financial statements under IFRS, management reporting and payroll on the accounting side, and Corporate Tax consultation, registration and filing support, VAT registration and filing and audit support on the tax side.

For Small Business Relief specifically, the work is usually reviewing your revenue position across current and prior periods, checking the conditions that sit behind the headline figure, confirming registration is in order, and preparing the return so the election is made correctly with the records to back it.

Aurum is an advisory firm, not a government authority. No one can guarantee that a particular business qualifies for the relief or that a given tax outcome will follow, and any firm suggesting otherwise is overselling. What an adviser can do is give you an accurate reading of your position and make sure the filing reflects it.

Frequently asked questions

What is Small Business Relief in the UAE? Small Business Relief is a UAE Corporate Tax measure that allows an eligible resident taxable person to be treated as having no taxable income for a tax period, with simplified return requirements. It must be elected in the Corporate Tax return.

Has UAE Small Business Relief been extended to 2029? Yes. Ministerial Decision No. 131 of 2026, announced by the Ministry of Finance on 7 August 2026, extends the relief to tax periods ending on or before 31 December 2029. The previous end date was 31 December 2026.

What is the revenue limit for Small Business Relief in the UAE? AED 3 million. The threshold is unchanged by the 2026 decision. It applies to revenue, meaning gross income before expenses, in the relevant tax period and in each previous tax period within the relief window.

Is Small Business Relief automatic? No. Eligible businesses must make an election in their Corporate Tax return for each tax period they wish to claim it. Being under AED 3 million does not apply the relief on its own.

Do businesses still need to register for Corporate Tax? Yes. A business that elects for Small Business Relief remains a taxable person under the Corporate Tax Law and must register, file a return and retain records for seven years after the end of the tax period.

What is the difference between the AED 3 million and AED 375,000 thresholds? AED 3 million is a revenue threshold for Small Business Relief eligibility. AED 375,000 is a taxable income threshold in the Corporate Tax rate structure, below which the 0% rate applies. Revenue is gross income; taxable income is profit after adjustments.

Can a business below AED 3 million automatically claim Small Business Relief? No. Qualifying Free Zone Persons and constituent companies of multinational groups with consolidated revenue above AED 3.15 billion are excluded regardless of their own revenue. Prior period revenue also matters, and the election must still be made.

How can an accounting firm help with Small Business Relief? An accounting firm can establish your revenue position from reliable records, check the eligibility conditions that sit behind the AED 3 million figure, confirm registration is in order, prepare the Corporate Tax return so the election is properly made, and maintain the documentation supporting it.

Not sure whether your business can benefit from Small Business Relief? Aurum can review your accounting records, your Corporate Tax position and your filing requirements, so you go into your next return knowing where you stand rather than guessing.

Talk to us about UAE Corporate Tax support, accounting and bookkeeping, VAT, or ongoing compliance for your UAE business.

This article reflects UAE Corporate Tax legislation as published by the Ministry of Finance and the Federal Tax Authority as at 24 August 2026. It is general information, not tax advice for any specific business. Eligibility for Small Business Relief depends on your own circumstances and should be confirmed against your actual figures and structure.

Sources Ministerial Decision No. 131 of 2026, UAE Ministry of Finance. Ministerial Decision No. 73 of 2023, UAE Ministry of Finance. Small Business Relief Corporate Tax Guide (CTGSBR1), Federal Tax Authority. Federal Decree-Law No. 47 of 2022 on the Taxation of Corporations and Businesses.