Great News for Your Planning Security in the UAE

UAE Small Business Relief Extended to 31 December 2029: What SMEs Need to Know

Quick answer: The UAE Ministry of Finance has extended Small Business Relief (SBR) under the Corporate Tax Law for another three years. Under Ministerial Decision No. 131, eligible businesses with annual revenue of AED 3 million or less can continue to be treated as having no taxable income for tax periods ending on or before 31 December 2029.

This is welcome news for small and medium-sized enterprises (SMEs) across the UAE, offering longer-term certainty for tax planning, cash flow forecasting, and business growth.

What Changed?

Previously, Small Business Relief was set to apply only to tax periods ending on or before 31 December 2026. With the new Ministerial Decision No. 131, the Ministry of Finance has pushed that deadline out to 31 December 2029 — giving qualifying businesses three additional years of relief.

The core eligibility rules remain unchanged. The AED 3 million revenue threshold, originally set under Ministerial Decision No. 73 of 2023, stays exactly the same.

Who Qualifies for Small Business Relief?

To claim SBR, a business must meet the following conditions:

Revenue cap: Gross revenue must be AED 3 million or less for the current tax period and every prior tax period since 1 June 2023.
UAE tax residency: The business must be a Resident Person for UAE Corporate Tax purposes.
Election required: Relief is not automatic — an eligible business must make a valid election to claim it in its tax return.
Exclusions apply: Certain entities, such as Qualifying Free Zone Persons and members of large multinational groups, cannot claim SBR.

What Does the Relief Actually Mean?

Businesses that qualify and elect for Small Business Relief are treated as having derived no taxable income for that tax period — effectively a 0% Corporate Tax outcome. This significantly reduces the compliance burden that would otherwise come with calculating taxable income under the standard Corporate Tax rules.

What Doesn't Change

Even with the relief, qualifying businesses are not exempt from all obligations. You still need to:

Register for Corporate Tax with the Federal Tax Authority (FTA).
File your Corporate Tax return annually, even if your taxable income is treated as nil.
Maintain proper accounting records and supporting documentation.
Reassess eligibility every period, since exceeding the AED 3 million threshold in any period — past or present — disqualifies the business from claiming relief.

Why This Matters for UAE SMEs

Small and medium-sized businesses make up the vast majority of companies operating in the UAE and are a major contributor to the country’s non-oil economy. Extending SBR to 2029 gives founders and business owners a longer runway to plan investments, pricing, and growth strategies without the added complexity of full Corporate Tax computations — provided they stay within the revenue threshold.

Frequently Asked Questions

Until when has Small Business Relief been extended?

Small Business Relief now applies to tax periods ending on or before 31 December 2029, following Ministerial Decision No. 131.

What is the revenue threshold for Small Business Relief?

Businesses must have gross revenue of AED 3 million or less in the current tax period and all prior tax periods to qualify.

Is Small Business Relief automatic?

No. Eligible businesses must actively elect to claim Small Business Relief when filing their Corporate Tax return.

Do I still need to file a Corporate Tax return if I qualify for relief?

Yes. Corporate Tax registration and annual filing are still mandatory, even if your taxable income is treated as nil under the relief.

Does the relief apply to Free Zone companies?

Qualifying Free Zone Persons are excluded from claiming Small Business Relief.

How GWS Group Can Help

Confirming eligibility, filing elections correctly, and staying compliant with FTA requirements can be time-consuming — especially as your business grows toward the AED 3 million threshold. Our team can review your eligibility, handle registration, and manage your Corporate Tax filings so you don’t have to.

Get in touch with GWS Group to discuss your Corporate Tax and Small Business Relief position.

This article is for general informational purposes and does not constitute tax advice. Corporate Tax treatment depends on individual business facts. Consult the Federal Tax Authority or a qualified tax advisor for guidance specific to your situation.