UAE Small Business Relief Extended to 2029: AED 3m Threshold & Eligibility

Small Business Relief (SBR) has not ended in 2026. The UAE Ministry of Finance extended the measure: eligible tax periods that end on or before 31 December 2029 may fall within the relief window, subject to the legislation’s conditions. The AED 3 million revenue threshold remains in place. The extension gives eligible UAE businesses more time, but it does not make relief automatic or remove corporate tax registration, return-filing or record-keeping duties.

Last reviewed: 4 October 2026. This guide explains the announced change and practical checks to make before choosing SBR. Your result depends on your legal status, revenue history, tax period and other facts.

What changed in 2026?

On 7 August 2026, the Ministry of Finance announced Ministerial Decision No. 131 of 2026, amending Ministerial Decision No. 73 of 2023. The amendment extends the period during which SBR may be claimed to tax periods ending on or before 31 December 2029. The Ministry also confirmed that the AED 3 million threshold prescribed under Decision No. 73 continues to apply to tax periods commencing on or after 1 June 2023 and ending within the extended period.

This is a change to the period-end cut-off, not a new general tax exemption. A qualifying person must still satisfy the conditions for the relevant period and make the required election. Read the Ministry of Finance announcement and Ministerial Decision No. 131 of 2026 for the source rules.

What Small Business Relief does—and does not do

SBR is an election under the UAE Corporate Tax framework. When a qualifying Resident Person makes a valid election for a tax period, the person is treated as not having derived taxable income for that period. It is not the same as a 0% tax rate applied after a normal tax computation, and it should not be described as a blanket “tax-free” status for a company.

The Federal Tax Authority (FTA) states that the election is made for each tax period, and that other exemptions, reliefs and deductions are not available for a period in which SBR is elected. The treatment can also affect tax attributes and net interest expenditure. Review the tax-loss and interest rules before making an election; do not assume that an SBR election is automatically the best result just because revenue is below the threshold.

Importantly, an eligible person still has corporate tax compliance responsibilities. The FTA has confirmed that eligible persons must register where required, submit a simplified corporate tax return within the statutory timeframe, and maintain records that support the information and revenue figures reported. For a separate overview of registration steps and deadlines, see BWMC’s UAE Corporate Tax Registration guide.

Who may qualify for UAE Small Business Relief?

The FTA describes the eligible person as a Resident Person, whether a natural person or a juridical person, that meets the conditions. In broad terms, check each of the following for the tax period you are considering:

• Revenue: revenue is AED 3 million or less in the current tax period and in all previous tax periods, as required by the rules.
• Residency and taxable-person status: confirm that the person is a Resident Person for UAE Corporate Tax purposes and is within the corporate tax regime. Natural persons have separate rules for when business activity brings them into the regime.
• Excluded categories: a Qualifying Free Zone Person cannot elect SBR. The FTA also identifies a member of a multinational enterprise group with consolidated group revenue exceeding AED 3.15 billion as excluded.
• Election: the person must choose SBR for the relevant tax period through the tax return process. It is not applied automatically.

Revenue is not the same as accounting profit or taxable income. A business can have modest profit but revenue above the threshold, or revenue below the threshold but a complex tax position. If revenue exceeded AED 3 million in a previous relevant tax period, do not assume the business becomes eligible again merely because revenue later falls; the FTA’s test refers to the current and previous periods.

See the FTA’s Small Business Relief guidance for its current summary of the conditions and exclusions. The official guidance should be read with the 2026 ministerial amendment for the updated end date.

What does the 31 December 2029 date mean?

The date refers to the end of a tax period, not a single filing deadline for every company. The Ministry’s announcement covers eligible tax periods ending on or before 31 December 2029. Your own tax period may not match the calendar year, so check the period registered in EmaraTax and the dates in the company’s financial records.

For example, a business with a calendar-year tax period ending 31 December 2029 may fall within the extended period if it meets all the other requirements and makes a valid election. This example does not establish eligibility for any particular company. A period that ends after the cut-off should not be treated as covered merely because it began before that date. Confirm unusual, shortened or extended periods with a qualified tax adviser and the applicable decision.

Practical checks before you elect

1. Confirm the entity and tax period. Identify the taxable person, residency position, registration status and exact start and end dates in EmaraTax.
2. Build a revenue history. Reconcile revenue for the current and all previous relevant tax periods. Keep a clear bridge from the ledger and financial statements to the figure used for the threshold test.
3. Check exclusions. Review free-zone status and group relationships, including whether the entity is a member of a multinational group covered by the exclusion.
4. Compare the consequences. Consider available losses, net interest expenditure, other reliefs or deductions and the effect of the election under the applicable rules. Ask for a period-specific comparison rather than making a decision from revenue alone.
5. Prepare and file the return. Make the election in the relevant corporate tax return process. The FTA says SBR does not remove the requirement to file; eligible persons use a simplified return.
6. Retain supporting records. Keep transaction records, asset information, liabilities, ownership information and other documents needed to support the return and eligibility.

The FTA states that corporate tax returns are generally due within nine months from the end of the relevant tax period. Confirm the actual deadline for your registered period and any specific decision or instruction that applies. The SBR extension to 2029 does not extend a return deadline.

Records that make an eligibility review easier

Prepare the company’s trade licence and ownership details, corporate tax registration information, registered tax period, trial balance, general ledger, financial statements, bank reconciliations, revenue schedules and prior tax returns. Include records of transactions, assets, liabilities and ownership interests, plus relevant FTA correspondence and details of related-party or group arrangements.

The exact evidence varies with the nature of the business. The FTA’s September 2026 reminder stresses that records should support revenue, taxable income and eligibility. Good records help the business explain its position if the FTA asks questions; they do not themselves guarantee that an election is valid.

Questions business owners ask

Has Small Business Relief been extended beyond 2026?

Yes. The Ministry of Finance announced that eligible tax periods ending on or before 31 December 2029 may be covered, subject to the applicable conditions and a valid election.

Is the AED 3 million threshold based on profit?

No. The FTA describes the test in terms of revenue. Revenue and taxable income are different measures, so use the relevant records and the legal definition rather than net profit as a substitute.

Does a company still file a tax return if it elects SBR?

Yes. The FTA says eligible persons must continue to fulfil their obligations, including filing a simplified corporate tax return within the prescribed deadline and keeping supporting records.

Is a free-zone company automatically eligible?

No. A Qualifying Free Zone Person is excluded from electing SBR. A free-zone licence alone does not settle whether the entity is a Qualifying Free Zone Person; assess its status under the rules.

Should every eligible business elect SBR?

Not automatically. The election’s consequences for other reliefs, deductions, tax losses and net interest expenditure should be reviewed against the business’s circumstances before filing.

How BWMC can support your review

BWMC supports UAE businesses with corporate tax registration, accounts review, tax computations and return preparation. We can help organise the revenue history, identify records to reconcile, review questions for your tax position and agree the scope of any filing support. The final eligibility assessment depends on the company’s facts and current rules.

Read about our corporate tax support in Dubai and across the UAE, or contact BWMC to discuss your entity type, tax period and records. For statutory interpretation, rely on the official legislation and FTA guidance, and obtain case-specific professional advice.

Sources checked on 4 October 2026: UAE Ministry of Finance announcement and Ministerial Decision No. 131 of 2026; FTA Small Business Relief guidance; FTA corporate tax filing reminder dated 2 September 2026. This article is general information, not a determination of a taxpayer’s eligibility or tax liability.