UAE

UAE Small Business Relief extended to end of 2029

On 7 August 2026 the UAE Ministry of Finance announced that Small Business Relief under Corporate Tax is extended to tax periods ending on or before 31 December 2029. The underlying Ministerial Decision No. 131 of 2026 was signed on 29 July 2026 and is already in effect. The AED 3 million revenue threshold per tax period and any prior period is retained. We unpack what changed for companies that had already planned 2026 as the last SBR year, who really qualifies, who is excluded and what to do with the current return.

Marsel ShadmanovCEO and Partner, Garant Business Consultancy · UAE banking, structuring and tax

7 August 20268 min read

On 7 August 2026, the UAE Ministry of Finance (mof.gov.ae) publicly announced the extension of the Small Business Relief (SBR) under UAE Corporate Tax to tax periods ending on or before 31 December 2029, through Ministerial Decision No. 131 of 2026 signed on 29 July 2026 and amending Ministerial Decision No. 73 of 2023 as regards the SBR availability window; the revenue threshold of AED 3 million per tax period and any prior tax period is retained unchanged; SBR remains available to Resident Persons under Federal Decree-Law No. 47 of 2022 (Corporate Tax Law); Qualifying Free Zone Persons (QFZP) and Multinational Enterprises Groups (MNE Groups) with consolidated group revenue above AED 3.15 billion remain excluded per the existing rules; the relief is not granted automatically — it must be explicitly elected in the corporate tax return filed through the EmaraTax platform; cross-verified against The National, Gulf News, IFC Review, Willow Law and Bloomberg Tax

Common questions on this topic

What is Small Business Relief (SBR) under UAE Corporate Tax?

Small Business Relief (SBR) is a special relief under UAE Corporate Tax introduced by Ministerial Decision No. 73 of 2023 in implementation of Federal Decree-Law No. 47 of 2022 (Corporate Tax Law). If a UAE resident taxpayer explicitly elects SBR in the corporate tax return, its taxable income for that tax period is treated as nil and no corporate tax is due. In parallel, a simplified compliance regime applies — no detailed transfer pricing adjustments, no loss carry-forward interaction for that period and so on. The key condition is that the taxpayer's revenue does not exceed AED 3 million in the relevant tax period AND in every previous tax period from the moment corporate tax entered into force. Once a company's revenue breaches AED 3 million even once, the right to SBR is lost permanently — in that and all subsequent periods.

What exactly changed with the Ministry of Finance decision of 29 July 2026?

Ministerial Decision No. 131 of 2026, signed by the UAE Ministry of Finance on 29 July 2026 and publicly announced on 7 August 2026, amends Ministerial Decision No. 73 of 2023 as regards the SBR availability window. Under the previous rules, SBR applied to tax periods commencing on or after 1 June 2023 and ending on or before 31 December 2026 — meaning that for most companies with a calendar financial year SBR was closing at the end of FY 2026. The new decision extends the window by three additional years: SBR is now available for tax periods commencing on or after 1 June 2023 and ending on or before 31 December 2029. All other criteria — the AED 3 million revenue threshold, resident-taxpayer status, the requirement to elect explicitly in the return, exclusions of QFZPs and MNE Groups — remain unchanged. The Ministry deliberately kept the AED 3 million threshold at its existing level, so that the relief continues to target genuinely small and starting businesses.

Who qualifies for SBR and who is excluded?

SBR is available to UAE Resident Persons (as defined by the Corporate Tax Law) whose revenue does not exceed AED 3 million in the relevant tax period and in every previous tax period from 1 June 2023. There are two key exclusions. First, Qualifying Free Zone Persons (QFZP): companies applying the 0% Corporate Tax regime on qualifying income in free zones cannot claim SBR in parallel. The three-year extension notably reduces the risk of a coverage gap for companies planning a transition into QFZP status. Second, members of Multinational Enterprises Groups (MNE Groups) with consolidated group revenue above AED 3.15 billion: they fall under Pillar Two (global minimum tax) rules and SBR is not available to them. In addition, a general anti-abuse rule applies: artificially splitting a business so that each piece stays below the AED 3 million threshold qualifies as an abuse under Article 50 of the Corporate Tax Law, and SBR will be revoked.

Do I still need to file a corporate tax return if I elect SBR?

Yes. SBR does not remove the obligation to file the corporate tax return — the relief is not applied automatically. The process is: (1) the company registers for corporate tax through the EmaraTax platform of the Federal Tax Authority (FTA); (2) within the statutory deadline — no later than 9 months after the end of the tax period — a simplified return is filed; (3) in the return itself, the taxpayer explicitly elects Small Business Relief; (4) subject to the conditions, the taxable income and the corporate tax due for that period are treated as nil. The FTA publicly reminded taxpayers of this obligation on 3 August 2026: missing the deadline or failing to elect SBR is a separate infringement with its own penalties, regardless of the fact that no tax would have been due anyway. For an FY ending 31 December 2025, the filing and payment deadline is 30 September 2026.

I had assumed 2026 was the last SBR year — what changes for my plan?

Before 7 August 2026, many tax advisors and companies themselves assumed that Small Business Relief was expiring at the end of the tax period ending 31 December 2026 and treated 2027 as the first year of full corporate tax (9% above AED 375,000 of taxable income). Ministerial Decision No. 131 of 2026 changes that: businesses with revenue up to AED 3 million now have three additional full years of guaranteed simplified compliance — until the end of 2029. Practically this means: (1) do not force accelerated moves to QFZP status or restructuring purely to escape 2027 corporate tax — there is time to think; (2) revisit financial models for 2027–2029 with the assumption that SBR remains available while revenue stays below AED 3 million; (3) monitor revenue tightly — once it exceeds AED 3 million even once, SBR is lost for all subsequent periods; (4) do not relax on the return itself — it still has to be filed, and SBR needs to be explicitly elected each year.

On 7 August 2026 the UAE Ministry of Finance announced that Small Business Relief (SBR) under Corporate Tax has been extended by three years — to tax periods ending on or before 31 December 2029. The underlying Ministerial Decision No. 131 of 2026, signed on 29 July 2026, amends Ministerial Decision No. 73 of 2023. The revenue threshold — up to AED 3 million per tax period and every prior tax period — is kept unchanged.

What happened

On 7 August 2026 the UAE Ministry of Finance (mof.gov.ae) publicly announced the issuance of Ministerial Decision No. 131 of 2026. The decision was signed by the Minister on 29 July 2026 and takes effect the day following its official publication. Legally, it amends Ministerial Decision No. 73 of 2023 — the base act on Small Business Relief issued under Federal Decree-Law No. 47 of 2022 (Corporate Tax Law).

The substantive change is a single but material one: the SBR availability window has been extended by three years. Previously, the relief applied to tax periods commencing on or after 1 June 2023 and ending on or before 31 December 2026. The upper bound is now shifted to 31 December 2029. Nothing else was touched: the same AED 3 million revenue threshold, the same scope of taxpayers, the same exclusions, the same election procedure in the return.

According to the Ministry, the extension aims to "support the growth of small businesses and start-ups, strengthen the UAE business environment and reinforce the country's position as a leading global investment destination".

Who qualifies for SBR

The relief is addressed to UAE Resident Persons under the Corporate Tax Law. The core condition is that revenue does not exceed AED 3 million in the relevant tax period and in every previous tax period from 1 June 2023 onwards. This is a fundamental detail: once a company's revenue crosses AED 3 million even once, SBR is lost in all subsequent periods — there is no rolling back.

For those who do qualify, the effect is a simplified compliance regime and zero corporate tax due for the period. The general Corporate Tax rules (AED 375,000 profit threshold, 9% rate above it) continue to exist in parallel and switch in as soon as SBR ceases to apply. A detailed breakdown of the AED 375,000 threshold and the 9% rate is in a separate article — UAE Corporate Tax 9%: the AED 375,000 threshold, the 0% relief and the first return.

Who does not qualify for SBR

The exclusion rules were not amended by the 29 July 2026 decision, but they are worth restating.

Qualifying Free Zone Persons (QFZP). Companies applying the 0% Corporate Tax regime on qualifying income in free zones cannot elect SBR in parallel — they already benefit from a dedicated relief. Practical implication of the extension to 2029: companies still planning a transition into QFZP status now have more time to prepare properly and are less pressured to jump into QFZP status merely to escape full tax.
Multinational Enterprises Groups (MNE Groups) with consolidated group revenue above AED 3.15 billion. Pillar Two rules (global minimum tax) apply and SBR is not available.
Artificially separated businesses. Structures in which a single business is split into several companies so that each piece stays under AED 3 million qualify as abuse under the general anti-abuse rule of Article 50 of the Corporate Tax Law. SBR is then revoked and the general regime applies.

A broader overview — who falls within UAE Corporate Tax and under which statuses — is available in the article UAE Corporate Tax 9%: who pays, who is exempt and how it works.

How SBR is elected

The relief is not granted automatically. The process is:

the company registers for corporate tax through the EmaraTax platform of the Federal Tax Authority (FTA);
within the statutory deadline — no later than 9 months after the end of the tax period — a simplified return is filed;
the return itself explicitly elects Small Business Relief;
subject to the conditions, taxable income and corporate tax due for the period are treated as nil.

On 3 August 2026 the FTA publicly reminded taxpayers that SBR does not remove the return-filing obligation. Missing the deadline or failing to elect SBR is a separate infringement with its own penalties, regardless of the fact that no tax would have been due anyway. For a financial year ending 31 December 2025, the filing and payment deadline is 30 September 2026.

What it means for business

For small and starting businesses with revenue below AED 3 million

The headline: you now have three additional full years of guaranteed simplified compliance and zero corporate tax, provided the SBR conditions are met. Practical recommendations:

do not delay EmaraTax registration and return filing — SBR is still elected in the return, not by default;
track revenue tightly in real time: the AED 3 million threshold works "once and forever" — a single breach closes the door for future periods;
plan your financial model on the basis that once revenue exceeds the threshold, the general 9% regime (above AED 375,000 profit) kicks in immediately.

For those who had planned 2027 as "the first full-tax year"

Many advisors before 7 August 2026 assumed that 2026 would be the last SBR year and treated 2027 as the start of the full regime. That plan is no longer accurate for companies that remain within the AED 3 million perimeter. There is no need to force accelerated restructuring or a rush into QFZP status purely to escape 2027 corporate tax. There are three years of planning space.

For businesses that have already outgrown AED 3 million

The extension changes nothing: there is no path back into the relief. The general Corporate Tax regime and mandatory EmaraTax return filing apply per the standard rules.

Strategic context

Decision 131 of 29 July 2026 is part of a consistent MoF policy to keep the administrative burden low on small and starting businesses. Over the same summer weeks of 2026, the FTA additionally extended and clarified related deadlines (notably, the first corporate tax return deadline for an FY ending 31 December 2025 has been set at 30 September 2026). The overall vector is clear: 9% Corporate Tax is being introduced gradually, small business is protected by a dedicated simplified regime over a five-year horizon (2023–2029), and the QFZP and MNE Group exclusions remain in place under their existing logic.

For the market, this means two things. First, stability of rules and predictable planning: three additional years of runway allow many entrepreneurs to safely scale before entering the full tax regime. Second, discipline is still required: the relief only works with timely registration, filing and an explicit election.

Bottom line

Ministerial Decision No. 131 of 2026 of the UAE Ministry of Finance (signed 29 July 2026, publicly announced 7 August 2026) extends Small Business Relief under Corporate Tax to tax periods ending on or before 31 December 2029. The AED 3 million revenue threshold, the scope of taxpayers (Resident Persons), the exclusions (QFZP, MNE Groups above AED 3.15 billion, artificially split businesses) and the election procedure (elect in the return via EmaraTax) are all retained unchanged. For small business this is three additional years of simplified compliance and zero corporate tax — provided revenue does not exceed AED 3 million in the current or any prior tax period.

This material is for information only and does not constitute legal, tax or advisory advice. Please verify the precise SBR conditions, QFZP and MNE Group restrictions, EmaraTax registration and return-filing procedures on the official websites of the Ministry of Finance (mof.gov.ae) and the Federal Tax Authority (tax.gov.ae) and with a qualified tax advisor.

Topics:UAETaxCorporate TaxSmall Business ReliefSBRMoFFTASME