UAE Small Business Relief Extended to 2029: What Changes

UAE Small Business Relief has been extended. Under Ministerial Decision No. 131 of 2026, announced by the Ministry of Finance on 7 August 2026, businesses with revenue of AED 3 million or less can elect the relief for tax periods ending on or before 31 December 2029 (previously 31 December 2026).

If you had planned for the relief to end this year, a business on a calendar financial year now has three more tax years in which it can elect it: 2027, 2028 and 2029. Everything else about how it works is the same, including the trade-offs.

What changed

Only the end date. Ministerial Decision No. 131 of 2026 amends Ministerial Decision No. 73 of 2023, which set up Small Business Relief (SBR). The relief was due to stop at tax periods ending on or before 31 December 2026. It now runs to tax periods ending on or before 31 December 2029.

Nothing else changed. The revenue threshold, the exclusions, the filing duties and the rules on losses and interest are exactly as they were. You can read the announcement on the Ministry of Finance website.

A quick reminder of what the relief does: if you elect it for a tax period, you are treated as having no taxable income for that period, so there is no corporate tax to pay. This is different from the standard 0% band, which every business gets on its first AED 375,000 of taxable income whether or not it claims SBR.

Who qualifies

You can elect SBR for a tax period if all of the following apply:

• You are a UAE resident person. This can be a company or an individual in business. Individuals are only within Corporate Tax once their business turnover exceeds AED 1 million in a calendar year.
• Your revenue is AED 3 million or less in the current tax period and in each previous tax period. This is the revenue in your financial statements, not your profit.
• You are not a Qualifying Free Zone Person. A free zone company that uses the 0% Qualifying Free Zone Person regime cannot also elect SBR.
• You are not part of a large multinational group. Members of Multinational Enterprise Groups with consolidated group revenue above AED 3.15 billion are excluded.

Two points people often miss:

• Going over the threshold once ends your eligibility. If your revenue exceeds AED 3 million in any tax period, you cannot elect SBR for that period or any later one.
• Splitting a business to stay under the threshold does not work. If the Federal Tax Authority finds that a business was artificially split and the combined revenue is over AED 3 million, it can treat this as an arrangement to obtain a Corporate Tax advantage under the anti-abuse rules.

What you still have to do

SBR is a relief you choose, not an exemption from the system. To use it you must:

1. Register for Corporate Tax. If you are within Corporate Tax, you must register even if you expect to pay nothing. See our Corporate Tax Registration service if you have not registered yet.
2. Elect SBR in your Corporate Tax return. There is no separate application. You make the election in the return for each tax period you want it to apply to. If you do not elect it, the standard rules apply.
3. File your return within 9 months of the end of the tax period. SBR businesses file a simplified return, but the deadline is the same as everyone else's. Our Corporate Tax Filing service covers the return and the election.
4. Keep your records. You need books that show your revenue for each period, so you can prove you stayed within the threshold.

The trade-off: losses and interest

Electing SBR is not free. In any tax period where you elect it:

• Tax losses cannot be accrued, utilised or transferred. A loss you make in an SBR year is gone. It cannot be carried forward to reduce tax in a later year.
• Net interest expenditure cannot be carried forward to later years either.

Losses and net interest expenditure from earlier periods where you did not elect SBR are preserved. They carry forward and can be used in a later period where you do not elect SBR, under the normal rules.

An example of when SBR is not the best choice

A trading company has revenue of AED 1.2 million and a tax loss of AED 300,000 in its first year. The next year it grows to AED 3.5 million in revenue, so it cannot use SBR, and it makes a taxable profit of AED 900,000.

• If it elected SBR in year one: it paid no tax that year, but it would have paid none anyway because it made a loss. The AED 300,000 loss is lost. In year two it pays 9% on AED 525,000 (AED 900,000 less the AED 375,000 0% band): AED 47,250.
• If it did not elect SBR in year one: it still paid no tax that year. The AED 300,000 loss carries forward, so year two taxable income is AED 600,000. It pays 9% on AED 225,000: AED 20,250.

Not electing saves AED 27,000. The general rule: if you are profitable and comfortably under AED 3 million, SBR is usually worth electing. If you are making a loss, or you expect to grow past AED 3 million soon, work out both options before you file.

You can get a quick estimate for your own numbers with our corporate tax calculator.

Key dates

• 1 June 2023: SBR applies to tax periods starting on or after this date.
• 7 August 2026: The Ministry of Finance announces Ministerial Decision No. 131 of 2026, extending the relief.
• 31 December 2029: The last tax period end date that can qualify. For a calendar year business, the year ending 31 December 2029 is the last eligible period.
• 9 months after each period end: The filing deadline for every return, including simplified SBR returns. For a period ending 31 December 2029, that is 30 September 2030.

If your financial year does not follow the calendar year, check the end date of each period. For example, a business with a 31 March year end can elect SBR for the period ending 31 March 2029, but not for the period ending 31 March 2030, because that period ends after 31 December 2029.

Frequently asked questions

Has Small Business Relief been extended? Yes. Ministerial Decision No. 131 of 2026, announced on 7 August 2026, extends it to tax periods ending on or before 31 December 2029. It was previously due to end with tax periods ending on or before 31 December 2026.

Do I still need to file a corporate tax return under Small Business Relief? Yes. You must be registered for Corporate Tax, elect SBR in your return, and file a simplified return within 9 months of the end of each tax period. You also need to keep records.

Can a free zone company claim Small Business Relief? A Qualifying Free Zone Person cannot. A free zone company that is not a Qualifying Free Zone Person can elect SBR if it meets the other conditions, including revenue of AED 3 million or less.

What is the revenue threshold for Small Business Relief? AED 3 million or less, in the current tax period and in each previous tax period. If your revenue goes over AED 3 million in any period, you cannot elect SBR for that period or any later one.

Should every eligible business elect Small Business Relief? Not always. In a tax period where you elect SBR, tax losses cannot be accrued, utilised or transferred, and net interest expenditure cannot be carried forward. If you are making a loss or expect to grow quickly, compare both options first.

Need a second opinion?

If you are not sure whether to elect SBR this year, or you want the loss trade-off worked out on your actual numbers, we are happy to look at it with you. Book a consultation or get an instant quote for ongoing corporate tax and bookkeeping support.