The short answer
UAE resident businesses with revenue of AED 3 million or less can elect Small Business Relief for tax periods ending on or before 31 December 2029, after Ministerial Decision No. 131 extended the original 2026 end date. The election treats taxable income as nil, but you must still register, keep records and file a return.
What did Ministerial Decision No. 131 change?
It moved the end date of Small Business Relief from tax periods ending on 31 December 2026 to tax periods ending on or before 31 December 2029. The Ministry of Finance announced the decision on 7 August 2026 (Ministry of Finance via WAM). The AED 3 million revenue threshold set by Ministerial Decision No. 73 of 2023 did not change. For a calendar-year company, that means three more eligible years: 2027, 2028 and 2029.
Who can elect Small Business Relief?
A UAE resident person whose revenue is AED 3 million or less in the current tax period and in every previous tax period. Three groups are shut out regardless of revenue: Qualifying Free Zone Persons, members of multinational groups that meet the Pillar Two revenue test, and any business whose revenue passed AED 3 million in an earlier period. That last point catches growing companies: one strong year ends eligibility permanently, even if revenue later falls.
“extends the period during which Small Business Relief may be claimed”
How much does the relief save?
Up to the full corporate tax bill for each eligible period. Without the relief, a company pays 9% on taxable income above AED 375,000 (Cabinet Decision No. 116 of 2022). Take a trading company with AED 2.8 million revenue and AED 600,000 taxable income: standard tax is 9% of AED 225,000, which is AED 20,250. Elect the relief and it pays nothing for that period. Over the three added years, that is AED 60,750 if the figures stay the same.
What still has to be done if I elect the relief?
Everything except paying tax. You must register for corporate tax on time, since late registration carries an AED 10,000 penalty (Ministry of Finance). You must keep accounting records, file a return each year and make the election in that return. Transfer pricing documentation requirements are relaxed for small businesses, but the arm's-length rule still applies to related-party transactions.
Should a growing business still plan around the relief?
Only as a cash-flow benefit, not as a reason to restructure. Splitting one business into several companies to stay under AED 3 million each is treated as artificial separation, and the FTA can deny the relief and apply penalties. The better use of the extension is time: three more years to build a clean accounting and transfer pricing file before standard rates apply.
Frequently asked questions
Is Small Business Relief applied automatically?
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No. You elect it in your corporate tax return for each tax period.
Can a free zone company claim it?
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Not if it is a Qualifying Free Zone Person. A free zone company that is not a QFZP and meets the revenue test can elect it.
What revenue counts toward the AED 3 million limit?
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Gross revenue under the applicable accounting standards for the tax period, not profit.
Do I need audited accounts to claim it?
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Not because of the relief itself. Audits are required for Qualifying Free Zone Persons and for revenue above AED 50 million.
Sources
- Ministry of Finance extends Small Business Relief to tax periods ending on or before 31 December 2029 (Ministerial Decision No. 131) — WAM via Aletihad, 7 August 2026. Checked 16 October 2026.
- Cabinet Decision No. 116 of 2022 on the annual Taxable Income subject to Corporate Tax (AED 375,000) — UAE Ministry of Finance. Checked 16 October 2026.
- AED10,000 Penalty for Late Corporate Tax Registration (Cabinet Decision No. 10 of 2024) — UAE Ministry of Finance, 27 February 2024. Checked 16 October 2026.