UAE Extends Corporate Tax Relief for Small Business 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 sunset. The AED 3 million revenue threshold is unchanged. Here is exactly what the extension means for eligible UAE businesses.

What actually changed

On 7 August 2026, the UAE Ministry of Finance issued Ministerial Decision No. 131, extending the period during which eligible businesses can claim Small Business Relief. Under the original rules (Ministerial Decision No. 73 of 2023), the relief only covered tax periods ending on or before 31 December 2026. That cut-off has now been pushed to 31 December 2029 — three additional years of eligibility for qualifying small businesses and start-ups.

What did not change

The AED 3 million annual revenue threshold is exactly the same as before. If your business qualified last year, the same test still applies: UAE-resident taxable persons with revenue of AED 3 million or less, in the current and every previous tax period, can elect the relief. Qualifying Free Zone Persons and members of a Multinational Enterprise Group with consolidated group revenue above AED 3.15 billion remain excluded — this extension does not open the door to either.

Why this matters for your planning

Many small business owners were treating 2026 as a hard deadline — planning to restructure, incorporate additional entities, or push growth past the threshold once the relief expired. That pressure is now gone for three more years. If Small Business Relief has been core to your tax position, you now have a clear runway through the end of 2029 to grow before you need to plan for standard 9% Corporate Tax.

It is still an election, not automatic

Nothing about this changes the mechanics: Small Business Relief must be elected for each tax period, in your Corporate Tax return, and you must still register and file even while claiming it. Businesses that skip the election — assuming eligibility is automatic — lose the relief for that period with no way to backdate it.

The trade-off worth knowing

Electing Small Business Relief means being treated as having no taxable income for the period — but it also means you cannot carry forward tax losses or net interest expenditure from that period. If you are currently loss-making but expect strong profits soon, running the numbers both ways before electing is worth the hour it takes, especially now that the relief window is longer and the decision carries more years of consequence.

What to do now

If your revenue is under AED 3 million and you have been electing Small Business Relief, no action is needed — the same election process continues to apply for each period through 2029. If you were planning around a 2026 expiry — a restructure, a new entity, a deliberate slowdown — it is worth revisiting that plan now that the timeline has moved.