The UAE has extended UAE Small Business Relief to eligible Tax Periods ending on or before 31 December 2029. Ministerial Decision No. 131 of 2026 extends the previous end date of 31 December 2026, while the AED 3 million Revenue threshold remains unchanged.
The extension gives eligible Resident Persons additional Tax Periods in which they may elect for the relief. Businesses must still assess eligibility for each period and meet applicable Corporate Tax Registration, filing and record-keeping requirements.
This article outlines the 2029 extension to UAE Small Business Relief, who may qualify, how the Revenue test works and which Corporate Tax obligations continue to apply.
What Ministerial Decision No. 131 of 2026 Changes
Ministerial Decision No. 131 of 2026 extends the period during which eligible businesses can elect for Small Business Relief. It does not increase the Revenue threshold or replace the underlying eligibility rules established under Ministerial Decision No. 73 of 2023.
| Requirement | Previous Position | Current Position |
| Final eligible Tax Period | Ending on or before 31 December 2026 | Ending on or before 31 December 2029 |
| Revenue threshold | AED 3 million | AED 3 million |
| Election | Required for each Tax Period | Unchanged |
| Core eligibility rules | Applied under MD 73 of 2023 | Unchanged |
The amendment therefore extends the relief end date from 31 December 2026 to 31 December 2029. Businesses should continue applying the existing Revenue and eligibility tests to the additional Tax Periods.
Who Can Claim UAE Small Business Relief Until 2029?
Small Business Relief is available to eligible Resident Persons that satisfy the Revenue condition and are not within an excluded category.
This may include juridical persons and natural persons that are Taxable Persons for UAE Corporate Tax purposes.
A business should confirm:
- its Resident Person status;
- that the relevant Tax Period falls within the extended timeframe;
- that the Revenue condition is met; and
- that no exclusion applies.
The election must be made for each Tax Period through the relevant Corporate Tax Return.
How the AED 3 Million Revenue Threshold Works
The AED 3 million Revenue threshold applies to Revenue rather than profit or Taxable Income.
Revenue for Small Business Relief purposes is determined in accordance with the applicable accounting standards accepted in the UAE. Businesses should therefore assess eligibility using recognised Revenue rather than net profit after expenses.
The Revenue test also considers previous periods. Revenue must not exceed AED 3 million in the relevant Tax Period and all previous Tax Periods commencing on or after 1 June 2023.
For example, if a business records:
- AED 2.4 million Revenue in one Tax Period;
- AED 3.3 million in the following Tax Period; and
- AED 2.7 million in the next period,
It does not regain eligibility simply because Revenue later falls below AED 3 million. Once Revenue exceeds the threshold in a relevant or previous Tax Period, Small Business Relief is no longer available in subsequent eligible periods.
Businesses should therefore review historical Revenue rather than relying only on the latest financial year.
What Small Business Relief Means for Corporate Tax
Where an eligible Resident Person elects for Small Business Relief, the person is treated as having no Taxable Income for that Tax Period.
This can simplify the Corporate Tax calculation and reduce certain compliance requirements associated with determining Taxable Income.
However, Small Business Relief is not an automatic Corporate Tax exemption. The eligibility conditions must be met and the election must be made correctly for the relevant Tax Period.
What Businesses Still Need to Do When Electing for Small Business Relief
Businesses using UAE Corporate Tax Small Business Relief continue to have Corporate Tax compliance obligations.
These include:
- registering for Corporate Tax where required;
- making the election in the relevant Corporate Tax Return;
- submitting the applicable simplified Corporate Tax Return within the prescribed deadline; and
- maintaining accounting records and supporting documents that substantiate Revenue and eligibility.
Businesses electing for Small Business Relief are not required to maintain the Transfer Pricing documentation specified for the relevant Tax Period. However, transactions and arrangements with Related Parties and Connected Persons must still comply with the arm’s length principle.
Small Business Relief therefore simplifies certain Corporate Tax requirements but does not remove the need for accurate records and timely filing.
Which Businesses Cannot Claim Small Business Relief?
Certain Taxable Persons are excluded even if their Revenue does not exceed AED 3 million.
These include:
- Qualifying Free Zone Persons; and
- members of multinational enterprise groups with consolidated group Revenue of more than AED 3.15 billion.
A Free Zone business should therefore confirm its Corporate Tax status before assessing eligibility based on Revenue alone.
The rules also address artificial separation of substantially the same Business or Business Activity. Where businesses are artificially separated to remain below the Revenue threshold and obtain a Corporate Tax advantage, the arrangement may be challenged under the Corporate Tax anti-abuse rules.
How Small Business Relief Affects Tax Losses and Net Interest Expenditure
Tax Losses cannot be accrued or utilized for a Tax Period in which Small Business Relief is elected. Net Interest Expenditure arising during that elected Tax Period also cannot be deducted or carried forward.
Eligible amounts brought forward from earlier Tax Periods in which the relief was not elected may remain available for future periods, subject to the applicable Corporate Tax rules.
Businesses with existing losses or material financing costs should therefore consider these consequences before making an election.
What Businesses Should Review Before Electing for the Relief
Before making an election, businesses should review:
- Resident Person status;
- Revenue for the current and previous Tax Periods commencing on or after 1 June 2023;
- the applicable Tax Period;
- whether a QFZP or MNE Group exclusion applies;
- Corporate Tax registration and filing status;
- accounting records supporting Revenue;
- transactions with Related Parties or Connected Persons;
- brought-forward Tax Losses; and
- brought-forward Net Interest Expenditure.
This review helps confirm whether Small Business Relief eligibility is supported before the election is made through the Corporate Tax Return.
Conclusion
The extension of UAE Small Business Relief to eligible Tax Periods ending on or before 31 December 2029 gives qualifying Resident Persons additional periods in which the relief may be available.
The AED 3 million Revenue threshold and underlying eligibility rules remain unchanged. Businesses should review historical Revenue, applicable exclusions and relevant tax consequences before making an election for each Tax Period.
About SimplySolved
As an FTA Approved Tax Agency with ISO 9001, ISO 27001 and ISO 42001 certifications, SimplySolved supports UAE businesses with Corporate Tax advisory, accounting, registration, filing and Small Business Relief assessments.
Support may include reviewing Revenue records, prior Tax Period information, Related Party transactions, brought-forward Tax Losses and other documentation relevant to the relief election.
Partner with SimplySolved to assess Small Business Relief eligibility and confirm whether the business’s records support the election for the relevant Tax Period.
This article is provided for general informational purposes only and should not be relied upon as binding tax, legal, accounting or financial advice. Professional advice should be obtained based on the specific circumstances of the business and UAE legislation in force at the relevant time.
