UAE Extends Corporate Tax Relief for Small Businesses Until End of 2029

The UAE has extended Small Business Relief for Corporate Tax to tax periods ending on or before 31 December 2029 — three years beyond the original 2026 cut-off. Here is exactly what Ministerial Decision No. 131 changes, who still qualifies, and what small business owners should do now.

What actually changed

The UAE Ministry of Finance issued Ministerial Decision No. 131 of 2025, extending the period during which eligible businesses can claim Small Business Relief to tax periods ending on or before 31 December 2029. Previously, under Ministerial Decision No. 73 of 2023, the relief was only available through tax periods ending on or before 31 December 2026 — a deadline many small business owners had been watching closely. The extension gives businesses three additional years of relief eligibility.

The threshold has not changed

The existing AED 3 million annual revenue threshold set under Ministerial Decision No. 73 of 2023 remains exactly the same. If your business qualified before, you still qualify under the same rule — nothing about eligibility criteria has tightened or loosened, only the time window has been extended.

What Small Business Relief actually does

Businesses that elect for Small Business Relief are treated as having derived no taxable income for that tax period — effectively a 0% Corporate Tax outcome. It is not automatic: you must register for Corporate Tax and actively elect the relief in your return for each eligible period. The relief applies to tax periods beginning on or after 1 June 2023, and now continues through periods ending on or before 31 December 2029.

Who qualifies

UAE resident businesses — companies or individuals conducting business — with annual revenue of AED 3 million or less in the current tax period and all previous tax periods are eligible. Two groups are excluded regardless of revenue: Qualifying Free Zone Persons, and members of Multinational Enterprise Groups with consolidated group revenue exceeding AED 3.15 billion.

The trade-off worth knowing

Electing Small Business Relief means you are treated as having no taxable income — but it also means you cannot carry forward tax losses or net interest expenditure from that period. If your business is investing heavily now and expects strong profits in future years, running the numbers both ways before electing is worth the exercise. Many businesses default into claiming relief without checking whether forgoing it would actually save more tax later.

Why this extension matters for planning

The original 2026 cut-off meant many small businesses were bracing for a compliance step-up soon. With the window now open through 2029, business owners have real breathing room to plan growth, financing, and structural decisions without the relief expiring mid-strategy. It also removes a source of near-term uncertainty that was showing up in client planning conversations throughout 2026.

What to do now

Filing is still required even when claiming relief — this extension changes the eligibility window, not the obligation to register and file. If you have not yet registered for Corporate Tax, the 90-day registration deadline from incorporation still applies, and the AED 10,000 late-registration penalty is unaffected by this update. Confirm your revenue is genuinely under AED 3 million before assuming the relief applies, and elect it correctly in your return.