The UAE has extended Small Business Relief for corporate tax to tax periods ending on or before 31 December 2029, keeping the AED 3 million revenue threshold for small businesses and startups. The Ministry of Finance confirmed the move in Ministerial Decision No. (131), which amends the rules on the taxation of corporations and businesses.
Under Ministerial Decision No. (73) of 2023, the relief only covered tax periods ending on or before 31 December 2026 — a date small business owners had been circling since the regime began. The new decision keeps the same threshold, annual revenue of no more than AED 3 million, and applies it to tax periods commencing on or after 1 June 2023 that end before 2030.
What the relief actually does
Eligible businesses are treated as not having derived any taxable income for the period, provided they elect for the relief in each tax period. That is the simplification: nothing to compute, and lighter compliance obligations. The Federal Tax Authority has confirmed that qualifying businesses must still submit simplified corporate tax returns within the legal deadline. Businesses that skip the election keep the option to carry forward tax losses and net interest expenditure from eligible periods.
| Before | Now | |
|---|---|---|
| Relief available for | 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, unchanged |
Who cannot use it
Qualifying Free Zone Persons are excluded, as are members of multinational groups with consolidated revenue above AED 3.15 billion. For the businesses this relief is aimed at, neither applies.
What it means for SMEs in the UAE
The extension removes a deadline that was approaching: founders planning around the relief now have certainty on the AED 3 million line for the rest of the decade. It sits alongside other moves aimed at small businesses in the UAE, from fintech platforms built to fix SME invoice delays to AI tools pitched directly at SMEs.
The Ministry described the decision as part of its efforts to support small businesses and startups, strengthen the business environment and enable entrepreneurs to grow, per the press release. Eligibility details sit with the Federal Tax Authority’s Small Business Relief page.
What is Small Business Relief in the UAE?
A corporate tax relief for UAE-resident businesses with annual revenue of AED 3 million or less. Eligible businesses are treated as not having derived any taxable income for the tax period, provided they elect for the relief in each period.
Who qualifies for Small Business Relief?
UAE resident persons — companies or individuals running a business — with revenue of AED 3 million or less in the current and all previous tax periods. Qualifying Free Zone Persons and members of multinational groups with consolidated revenue above AED 3.15 billion cannot elect it.
When does Small Business Relief end now?
It applies to tax periods ending on or before 31 December 2029, under Ministerial Decision No. (131). The previous cut-off was 31 December 2026.
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