The UAE has officially extended Small Business Relief for Corporate Tax until the end of 2029, giving eligible small businesses, start-ups and entrepreneurs additional Tax Periods in which they may benefit from simplified Corporate Tax treatment.
Under Ministerial Decision No. 131 of 2026, the existing Small Business Relief threshold will continue to apply to Tax Periods commencing on or after 1 June 2023 and to subsequent Tax Periods that end on or before 31 December 2029.
The amendment does not increase the AED 3 million Revenue threshold. Instead, it extends the period during which eligible businesses can elect for Small Business Relief. The extension has also been reported by Gulf News following the Ministry of Finance announcement.
Businesses should remember that Small Business Relief is not an automatic Corporate Tax exemption. Eligibility must be assessed and the relief must be elected through the Corporate Tax Return for each applicable Tax Period. The Federal Tax Authority’s Small Business Relief guidance confirms that Revenue must be AED 3 million or less in the current and all previous relevant Tax Periods.
Quick Answer: UAE Small Business Relief is now available for qualifying Tax Periods ending on or before 31 December 2029. The Revenue threshold remains AED 3 million or less. Eligible Resident Persons must elect the relief through their Corporate Tax Return and must still comply with registration, filing and record-keeping obligations.
UAE Small Business Relief 2029: Key Facts
| Requirement | Current Position |
|---|---|
| Revenue threshold | AED 3,000,000 or less |
| Relief period | Tax Periods ending on or before 31 December 2029 |
| Starting date | Tax Periods commencing on or after 1 June 2023 |
| Eligible taxpayers | Qualifying Resident Persons |
| Election required? | Yes, for each relevant Tax Period |
| Treatment | Treated as having no Taxable Income for that Tax Period |
| Corporate Tax registration | Still required where applicable |
| Corporate Tax Return | Still required |
| Simplified return | Available where Small Business Relief is elected |
| Qualifying Free Zone Person | Cannot elect |
| Certain large MNE group members | Cannot elect |
| Arm’s-length principle | Still applicable |
| Record keeping | Required |
These conditions are reflected in current FTA Small Business Relief guidance.
What Changed Under Ministerial Decision No. 131 of 2026?
Ministerial Decision No. 131 of 2026 makes an important amendment to the existing Small Business Relief framework.
The Decision replaces Clause 2 of Article 2 of Ministerial Decision No. 73 of 2023 with wording confirming that the existing threshold applies to Tax Periods commencing on or after 1 June 2023 and continues to apply to subsequent Tax Periods ending on or before 31 December 2029.
Before the 2026 Amendment
Under the original rules, Small Business Relief was available for eligible Tax Periods ending on or before 31 December 2026.
The original framework was introduced through Ministerial Decision No. 73 of 2023. The UAE Ministry of Finance’s original Small Business Relief announcement explains the AED 3 million threshold and the principal eligibility conditions.
After Ministerial Decision No. 131 of 2026
The end date has now been extended to:
31 December 2029
The important point for businesses is that the period has changed, but the AED 3 million Revenue threshold has not.
Businesses that previously planned on Small Business Relief ending after 2026 should therefore reassess their Corporate Tax planning for the 2027–2029 period.
For a wider review of how Corporate Tax affects your business, see our Corporate Tax Impact Assessment UAE service.
What Is Small Business Relief Under UAE Corporate Tax?
Small Business Relief is provided under the UAE Corporate Tax framework to reduce the tax and compliance burden on eligible small businesses.
Where an eligible Resident Person elects for the relief, that person is treated as not having derived any Taxable Income for that Tax Period.
This is different from merely applying the standard Corporate Tax rates.
Small Business Relief is an election based primarily on Revenue and other eligibility conditions, rather than a separate lower Corporate Tax rate.
Companies that do not qualify for Small Business Relief continue to determine their Corporate Tax position under the normal Corporate Tax rules.
Businesses requiring assistance with their overall tax position can refer to Saif Chartered Accountants’ UAE Corporate Tax Advisory services in Dubai.
Who Can Claim UAE Small Business Relief Until 2029?
Having Revenue below AED 3 million does not automatically mean that a business qualifies.
Several conditions need to be considered.
The Taxpayer Must Be a Resident Person
The FTA states that Small Business Relief may be elected by eligible Resident Persons, including juridical persons and natural persons that fall within the Corporate Tax regime.
For natural persons, separate rules determine when an individual conducting a Business or Business Activity becomes subject to Corporate Tax.
The FTA currently states that a natural person comes within Corporate Tax where total Turnover from Business or Business Activities exceeds AED 1 million in a calendar year, subject to the applicable exclusions.
Revenue Must Be AED 3 Million or Less
The principal Small Business Relief threshold is:
AED 3,000,000 or less in Revenue.
The test applies not only to the current Tax Period but also to all previous relevant Tax Periods.
This means businesses should review their historic Revenue before making the election.
Small Business Relief Must Be Elected
The relief is not automatic.
An eligible Taxable Person must elect to apply Small Business Relief through its Corporate Tax Return for the relevant Tax Period.
The FTA reiterated this requirement in August 2026, confirming that eligible businesses must elect the relief through their Corporate Tax Returns.
Businesses unfamiliar with the filing process can also review our UAE Corporate Tax Registration guide.
The Tax Period Must Fall Within the Extended Window
Following Ministerial Decision No. 131 of 2026, the threshold applies to Tax Periods:
commencing on or after 1 June 2023 and ending on or before 31 December 2029.
Is the AED 3 Million Threshold Based on Revenue or Profit?
The AED 3 million Small Business Relief threshold is based on Revenue, not accounting profit or Taxable Income.
This distinction is important.
For example, assume a company has:
- Revenue: AED 3.4 million
- Operating expenses: AED 3.2 million
- Accounting profit: AED 200,000
Even though its accounting profit is relatively low, its Revenue exceeds AED 3 million. The Revenue test therefore becomes the relevant Small Business Relief issue.
By contrast, a company with Revenue of AED 2.8 million may potentially satisfy the Revenue requirement even if its profit margin is comparatively high, subject to all the other eligibility conditions.
Reliable bookkeeping is therefore important for determining the correct Revenue figure. Saif Chartered Accountants provides accounting services in Dubai, including bookkeeping, financial reporting and Corporate Tax support for SMEs and Free Zone companies.
What Happens If Revenue Exceeds AED 3 Million?
A particularly important rule is that the Revenue threshold must have been satisfied in both the current and all previous relevant Tax Periods.
The FTA gives an example of a Resident Person whose Revenue was AED 1.9 million in a later Tax Period but AED 4.3 million in an earlier Tax Period. The taxpayer does not qualify because the AED 3 million threshold had already been exceeded.
Consider the following simplified example:
| Tax Period | Revenue | Small Business Relief Position |
|---|---|---|
| 2026 | AED 2.4 million | Potentially eligible |
| 2027 | AED 2.8 million | Potentially eligible |
| 2028 | AED 3.2 million | Threshold exceeded |
| 2029 | AED 2.5 million | Not eligible based on previous threshold breach |
Businesses approaching AED 3 million should therefore monitor Revenue during the financial year, rather than waiting until the Corporate Tax filing deadline.
Does Small Business Relief Mean No Corporate Tax Return Is Required?
No.
This is one of the most important points for UAE SMEs.
The Federal Tax Authority confirmed on 3 August 2026 that Taxable Persons eligible for Small Business Relief must continue to fulfil their Corporate Tax obligations, including registration, filing and maintaining supporting records.
The FTA also confirmed that eligible taxpayers electing Small Business Relief can submit a simplified Corporate Tax Return.
You can read the official announcement here:
FTA – Eligible Small Businesses Must Submit Simplified Corporate Tax Returns
The normal filing deadline is generally within nine months from the end of the relevant Tax Period, subject to the applicable Corporate Tax rules and any specific relief or deadline announced by the authorities.
For further guidance, see our Guide to Corporate Tax Returns in the UAE.
Small Business Relief Is Not Automatic
Being below the AED 3 million Revenue threshold does not, by itself, activate the relief.
The business must elect for Small Business Relief for the relevant Tax Period.
This means the Corporate Tax Return should be reviewed carefully before submission.
A taxpayer should confirm:
- Revenue for the current Tax Period;
- Revenue for previous relevant Tax Periods;
- Resident Person status;
- Free Zone status;
- whether the entity forms part of an excluded multinational group; and
- whether electing Small Business Relief is appropriate for its overall Corporate Tax position.
Can a Free Zone Company Claim Small Business Relief?
This requires careful distinction.
A Qualifying Free Zone Person (QFZP) cannot elect for Small Business Relief.
However, the fact that a company is incorporated in a Free Zone does not, by itself, answer the question. Its actual Corporate Tax status needs to be determined.
Free Zone companies should therefore assess whether they meet the requirements to be treated as a QFZP before considering Small Business Relief.
For more information, see:
Qualifying Free Zone Persons Assessment
and
QFZP UAE Corporate Tax – Free Zone Person Status.
Can Members of Large Multinational Groups Claim Small Business Relief?
The relief is also unavailable to members of certain multinational groups.
The FTA states that a member of a multinational group with consolidated group Revenue exceeding AED 3.15 billion cannot elect for Small Business Relief.
The exclusion is designed to prevent a relatively small UAE entity forming part of a very large international group from accessing a relief designed for genuinely smaller businesses.
Does Small Business Relief Remove Transfer Pricing Requirements?
Small Business Relief simplifies certain compliance requirements, but businesses should not conclude that transactions with Related Parties can be ignored.
The FTA states that a person benefiting from Small Business Relief does not need to maintain transfer pricing documentation for that Tax Period, but must still comply with the arm’s-length principle.
Accordingly, transactions involving:
- shareholders;
- directors;
- group companies;
- Related Parties; and
- Connected Persons
should still be commercially supportable.
Businesses with intercompany or Related Party transactions can refer to Saif Chartered Accountants’ Transfer Pricing Services in Dubai and the UAE.
Should Every Eligible Business Automatically Elect for Small Business Relief?
Not necessarily.
Eligibility and whether it is commercially beneficial are two different questions.
Businesses should consider the effect of the election on other Corporate Tax provisions, including the treatment of Tax Losses and disallowed Net Interest Expenditure.
Under the original Ministerial Decision framework, where Small Business Relief is not elected, qualifying Tax Losses and disallowed Net Interest Expenditure may potentially be carried forward subject to the normal Corporate Tax conditions. The Ministry of Finance explained this treatment when Ministerial Decision No. 73 of 2023 was introduced.
A loss-making business should therefore avoid selecting Small Business Relief automatically without first reviewing its future tax position.
A Corporate Tax Impact Assessment in the UAE can help identify whether the election is suitable for the business.
Record-Keeping Requirements Still Apply
Small Business Relief does not eliminate accounting and documentation requirements.
The FTA confirmed in August 2026 that eligible taxpayers must maintain records capable of supporting information provided in the Corporate Tax Return and demonstrating eligibility for Small Business Relief.
Relevant records may include, depending on the business:
- accounting records;
- sales and purchase transactions;
- invoices;
- bank statements;
- assets and liabilities records;
- ownership information; and
- other supporting documents.
Accurate financial records are especially important because the Small Business Relief eligibility test is based on Revenue.
Artificially Splitting a Business Can Put Small Business Relief at Risk
Businesses should not artificially divide a single Business or Business Activity into multiple entities merely to keep each entity below the AED 3 million threshold.
The original Ministry of Finance Small Business Relief framework specifically addresses artificial separation of a Business.
Where the FTA determines that businesses have been artificially separated and the overall Revenue exceeds the threshold, the arrangement may be considered under the General Anti-Abuse Rule.
Business restructuring should therefore have genuine commercial and economic reasons rather than being undertaken simply to access Small Business Relief.
How Does the 31 December 2029 Deadline Work?
The exact wording of Ministerial Decision No. 131 of 2026 is important.
It refers to Tax Periods ending on or before 31 December 2029.
That means the result can differ depending on the company’s financial year.
Calendar-Year Business
A Tax Period of:
1 January 2029 – 31 December 2029
falls within the extended period, subject to the other eligibility conditions.
Business With a July-to-June Financial Year
A Tax Period ending:
30 June 2029
falls before 31 December 2029 and may therefore fall within the extended period.
However, the subsequent Tax Period ending:
30 June 2030
ends after the current 31 December 2029 cut-off and would therefore fall outside the period specified in Ministerial Decision No. 131 of 2026.
This distinction may be particularly important for companies with non-calendar-year financial periods.
UAE Small Business Relief 2029 Checklist
Before electing for Small Business Relief, a UAE business should check:
- Is the taxpayer a Resident Person?
- Is Revenue AED 3 million or less in the current Tax Period?
- Has Revenue remained AED 3 million or less in all previous relevant Tax Periods?
- Is the company a Qualifying Free Zone Person?
- Is it part of an excluded multinational enterprise group?
- Does the Tax Period end on or before 31 December 2029?
- Has the taxpayer completed the required Corporate Tax registration?
- Has Small Business Relief been correctly elected in the Corporate Tax Return?
- Are accounting and supporting records sufficient to establish the Revenue figure?
- Has the business considered the effect of the election on Tax Losses and its wider Corporate Tax position?
A documented assessment is preferable to simply assuming that Revenue below AED 3 million automatically qualifies the company.
What Should UAE SMEs Do Following the 2029 Extension?
The extension gives qualifying SMEs, entrepreneurs and start-ups additional time to benefit from Small Business Relief.
However, businesses should continue to:
- maintain reliable accounting records;
- monitor Revenue during each Tax Period;
- review historic Revenue;
- assess Free Zone status;
- identify Related Party transactions;
- submit Corporate Tax Returns on time; and
- review whether electing the relief is beneficial for each Tax Period.
The extension should therefore be viewed as an opportunity for simplified Corporate Tax treatment, not as permission to ignore Corporate Tax compliance.
How Saif Chartered Accountants Can Help
Saif Chartered Accountants supports SMEs, mainland companies and Free Zone businesses with UAE Corporate Tax, accounting, audit and tax compliance services.
Our Corporate Tax team can assist with:
- Small Business Relief eligibility reviews;
- Revenue threshold assessment;
- Corporate Tax registration;
- Corporate Tax Return preparation and filing;
- Corporate Tax Impact Assessment;
- QFZP and Free Zone Corporate Tax reviews;
- Tax Loss assessments;
- Related Party and transfer pricing reviews;
- accounting and financial reporting; and
- ongoing FTA compliance support.
As an FTA-registered Tax Agency, Saif Chartered Accountants provides Corporate Tax advisory and compliance support to businesses throughout Dubai and the UAE.
Businesses unsure whether they qualify for Small Business Relief or whether they should elect it can contact our team for a review of their Corporate Tax position.
Internal CTA: Speak to our UAE Corporate Tax advisers
Frequently Asked Questions About UAE Small Business Relief 2029
Is UAE Small Business Relief extended to 2029?
Yes. Ministerial Decision No. 131 of 2026 extends the relevant Small Business Relief period to qualifying Tax Periods ending on or before 31 December 2029.
What is the Small Business Relief Revenue threshold in the UAE?
The Revenue threshold remains AED 3 million or less. The condition applies to the current and all previous relevant Tax Periods.
Has the AED 3 million threshold been increased for 2027, 2028 or 2029?
No. The 2026 amendment extends the period of application, not the amount of the threshold. The threshold remains AED 3 million.
Is Small Business Relief automatic?
No. An eligible taxpayer must elect for Small Business Relief for the relevant Tax Period through its Corporate Tax Return.
Do businesses claiming Small Business Relief still need to file a Corporate Tax Return?
Yes. The FTA confirmed in August 2026 that eligible Taxable Persons must continue filing Corporate Tax Returns. Businesses electing Small Business Relief benefit from a simplified return.
Is the AED 3 million threshold based on Revenue or profit?
It is based on Revenue, not accounting profit or Taxable Income.
Can a business claim Small Business Relief after exceeding AED 3 million in an earlier Tax Period?
Generally no. The FTA requires Revenue to remain AED 3 million or less in both the current and all previous relevant Tax Periods.
Can a Free Zone company claim Small Business Relief?
A Qualifying Free Zone Person cannot elect for Small Business Relief. Other Free Zone businesses should determine their actual Corporate Tax status before assessing eligibility.
Does Small Business Relief eliminate transfer pricing requirements?
The FTA states that transfer pricing documentation is not required for the Tax Period where Small Business Relief applies, but the business must still comply with the arm’s-length principle.
When does the extended Small Business Relief period end?
Under Ministerial Decision No. 131 of 2026, the existing threshold continues to apply to relevant Tax Periods ending on or before 31 December 2029.
- Federal Tax Authority – Small Business Relief
- FTA – Small Business Relief and Simplified Corporate Tax Returns, August 2026
- UAE Ministry of Finance – Original Small Business Relief Decision
