Small Business Relief lets a UAE company with revenue of AED 3 million or less be treated as having no taxable income. It was due to stop applying after 2026. On 7 August 2026 the Ministry of Finance announced it has been extended to tax periods ending on or before 31 December 2029.
That matters because a great deal of what is written about UAE corporate tax still says the relief ends this year, and companies have been making structuring decisions on that basis.
What the relief actually does
It is not a lower rate. A company that elects Small Business Relief is treated as having no taxable income for that period, which means no corporate tax and a considerably lighter compliance burden. You still register and you still file the return; the election is made inside it.
The change was made by Ministerial Decision No. 131 of 2026, which amends Ministerial Decision No. 73 of 2023. The threshold is unchanged at AED 3 million. Only the end date moved.
Who can elect it
- Revenue of AED 3 million or less in the current tax period and in every previous one
- A resident taxable person for corporate tax purposes
- Elected in the tax return, for each period separately
The words "and in every previous one" carry more weight than they look. Cross AED 3 million once and you are out permanently, even if revenue falls back the following year. The relief is not a band you move in and out of.
Who cannot
- Qualifying Free Zone Persons. If you are claiming the 0% free zone rate you cannot also elect this relief. They are alternatives, not a stack.
- Members of multinational groups with consolidated group revenue above AED 3.15 billion.
What changed, precisely
| Before | After MD 131 of 2026 | |
|---|---|---|
| Revenue threshold | AED 3,000,000 | AED 3,000,000 (unchanged) |
| Applies to tax periods ending | on or before 31 December 2026 | on or before 31 December 2029 |
| Free zone persons eligible | No | No (unchanged) |
| Election required each period | Yes | Yes (unchanged) |
Why so much writing about this is wrong
Three sources say three different things right now, and all three are official. The Ministry of Finance announcement from 2023 still states the relief applies to periods ending on or before 31 December 2026, because it describes the original decision. The Federal Tax Authority page on the relief states the conditions without an end date at all. The August 2026 announcement is the one that carries the extension.
None of them is incorrect. They were published at different times about different decisions, and an article that reads only one of them arrives at a confident wrong answer. If you are checking this yourself, read the ministerial decision rather than a summary of it.
What to do about it
- Check your revenue against the threshold for every past period, not just this one. The disqualification is historical and permanent.
- Decide before you file, not after. The election lives in the return and there is no separate application.
- If you are in a free zone, model both routes. Relief now against qualifying income later is a real trade-off and the answer is rarely obvious.
- Diarise it anyway. Three extra years is not forever, and a company growing towards AED 3 million will fall out of this on its own schedule. The alternative route is set out in the free zone 0% rate.
Where this leaves your filing
It does not change the deadline. The return is still due nine months after your tax period ends, which for a December year end means 30 September. The relief changes what you owe, not when you have to say so. We cover the mechanics in the corporate tax filing deadline, and we handle registration and filing as part of tax and VAT registration.
Small Business Relief questions
Revenue. Not profit, not taxable income. A business with AED 2.8 million of revenue and a loss is inside the threshold; a business with AED 3.2 million of revenue and a small profit is outside it.
No. You register, you file, and you elect the relief inside the return. Filing is how you claim it, and the late-filing penalty applies whether or not you owe tax.
No. The condition is that revenue was at or below the threshold in the current period and in all previous ones. Crossing it once ends eligibility permanently.
Only by not being a Qualifying Free Zone Person. The two are alternatives. A free zone company that does not claim the 0% qualifying rate and meets the revenue test can elect the relief like any other resident company.
Unknown, and anyone who tells you otherwise is guessing. The relief has now been extended once; that is evidence of intent, not a commitment. Plan on the rules you can read.
No. VAT and corporate tax are separate regimes with separate thresholds. VAT registration becomes mandatory once taxable turnover crosses AED 375,000, and Small Business Relief has no bearing on it.
Accurate as of 29 August 2026, verified against the Ministry of Finance and the Federal Tax Authority. Ministerial Decision No. 131 of 2026 is listed in the ministry's financial legislation register; the extension was announced on 7 August 2026.
