UAE Extends Small Business Tax Relief Through 2029
Businesses must actively elect for it when filing their Corporate Tax return and continue to meet all applicable conditions, including registration, filing, and record-keeping requirements.
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The UAE Ministry of Finance recently announced that Ministerial Decision No. 131 of 2026 extends the Small Business Relief program under the Corporate Tax regime to tax periods ending on or before December 31, 2029, pushing back the original December 31, 2026 sunset date by three years.
The relief allows eligible businesses with annual revenue up to AED3 million (US$816,882) to elect to be treated as having no taxable income for the relevant tax period, effectively reducing their corporate tax liability to zero. That revenue threshold, first set under Ministerial Decision No. 73 of 2023, remains unchanged; only the timeline has been extended.
The relief isn’t automatic. Businesses must actively elect for it when filing their Corporate Tax return and continue to meet all applicable conditions, including registration, filing, and record-keeping requirements.
Certain categories remain excluded regardless of revenue, including Qualifying Free Zone Persons and members of larger multinational enterprise groups.
The Ministry framed the extension as part of a broader push to support entrepreneurs and small businesses, strengthen the UAE’s competitive tax environment, and reinforce the country’s appeal as a global investment hub.
It builds on the corporate tax framework introduced for financial years beginning on or after June 1, 2023, under which a standard 9% rate applies to taxable income above AED375,000.
RELATED: Two UAE Regulations SMEs Should Have on Their Radar
The UAE Ministry of Finance recently announced that Ministerial Decision No. 131 of 2026 extends the Small Business Relief program under the Corporate Tax regime to tax periods ending on or before December 31, 2029, pushing back the original December 31, 2026 sunset date by three years.
The relief allows eligible businesses with annual revenue up to AED3 million (US$816,882) to elect to be treated as having no taxable income for the relevant tax period, effectively reducing their corporate tax liability to zero. That revenue threshold, first set under Ministerial Decision No. 73 of 2023, remains unchanged; only the timeline has been extended.
The relief isn’t automatic. Businesses must actively elect for it when filing their Corporate Tax return and continue to meet all applicable conditions, including registration, filing, and record-keeping requirements.
Certain categories remain excluded regardless of revenue, including Qualifying Free Zone Persons and members of larger multinational enterprise groups.
The Ministry framed the extension as part of a broader push to support entrepreneurs and small businesses, strengthen the UAE’s competitive tax environment, and reinforce the country’s appeal as a global investment hub.
It builds on the corporate tax framework introduced for financial years beginning on or after June 1, 2023, under which a standard 9% rate applies to taxable income above AED375,000.
RELATED: Two UAE Regulations SMEs Should Have on Their Radar
