UAE Extends Small Business Relief to 2029 — What Your Business Needs to Know

Big news for small businesses, start-ups, and entrepreneurs across the UAE.

The UAE Ministry of Finance has issued Ministerial Decision No. 131 of 2026, extending the period during which eligible businesses can claim Small Business Relief (SBR) for Corporate Tax purposes.

The relief, which was previously available for tax periods ending on or before 31 December 2026, has now been extended to tax periods ending on or before 31 December 2029.

Importantly, the AED 3 million revenue threshold has not changed.

For eligible businesses, this extension provides additional years of simplified Corporate Tax treatment and greater certainty when planning for growth, investment, and compliance.

At Nuvance Consultants, we help UAE businesses understand whether they qualify, make the correct election, and remain compliant with UAE Corporate Tax requirements.

What Is Small Business Relief?

Small Business Relief is a Corporate Tax relief available to eligible UAE Resident Persons whose revenue meets the prescribed threshold and other conditions.

Where an eligible business elects for the relief, it is treated as having not derived any Taxable Income for that tax period. This can result in no Corporate Tax liability for that period, subject to the applicable rules and conditions.

The purpose of the relief is to reduce the Corporate Tax compliance burden for smaller businesses and support the UAE's start-up and SME ecosystem.

What Has Changed Under Ministerial Decision No. 131 of 2026?

The main change is the extension of the relief period.

1. The deadline has moved from 2026 to 2029

Previously, the AED 3 million threshold applied to relevant tax periods ending on or before 31 December 2026.

Under Ministerial Decision No. 131 of 2026, the threshold continues to apply to subsequent tax periods ending on or before 31 December 2029.

This gives qualifying businesses an additional three years within the current relief framework.

2. The AED 3 million revenue threshold remains unchanged

The revenue threshold remains:

AED 3,000,000 per tax period

The important point is that Small Business Relief is based on revenue, not profit.

A business may be profitable and still potentially qualify if it satisfies the revenue and other eligibility requirements.

However, the revenue test is cumulative: the business must not have exceeded AED 3 million in the relevant tax period or in any previous tax period covered by the rules.

3. The relief continues from 1 June 2023 through the extended period

The AED 3 million threshold applies to tax periods commencing on or after 1 June 2023 and now continues for subsequent tax periods ending on or before 31 December 2029.

This means eligible businesses can continue to consider Small Business Relief within the extended period, provided they satisfy all applicable conditions.

Who Can Qualify for Small Business Relief?

Generally, the relief is available to a UAE Resident Person, including eligible natural persons and juridical persons, provided the relevant conditions are satisfied.

The key revenue condition is that revenue must be AED 3 million or less in both:

• The current Tax Period; and
• All previous Tax Periods relevant to the relief.

If the business exceeded the AED 3 million threshold in a relevant previous period, it may no longer be eligible for Small Business Relief in later periods, even if its revenue subsequently falls below AED 3 million.

Who Cannot Elect for the Relief?

Not every UAE business below AED 3 million automatically qualifies.

The Federal Tax Authority identifies certain exclusions, including:

Qualifying Free Zone Persons

A Qualifying Free Zone Person cannot elect for Small Business Relief.

Free Zone businesses therefore need to carefully consider their Corporate Tax position rather than assuming that the AED 3 million threshold automatically makes them eligible.

Certain Multinational Enterprise Group Members

A member of a multinational enterprise group falling within the relevant Corporate Tax reporting framework and consolidated revenue threshold is also excluded from Small Business Relief. The FTA currently identifies the relevant threshold as AED 3.15 billion.

Is Small Business Relief Automatic?

No.

This is one of the most important points for business owners to understand.

Simply having revenue below AED 3 million does not automatically give a business the relief.

An eligible taxpayer must elect for Small Business Relief when submitting its Corporate Tax Return for the relevant Tax Period. The election is made for each applicable Tax Period.

Therefore, businesses should not treat the AED 3 million threshold as a substitute for Corporate Tax compliance.

What Happens When You Elect for the Relief?

When an eligible business validly elects for Small Business Relief, it is treated as having no Taxable Income for that Tax Period.

As a result, no Corporate Tax is payable for that period under the relief.

However, the election also has important consequences that business owners should consider before making the decision.

Tax losses

Tax losses incurred during a Tax Period in which Small Business Relief is elected cannot be carried forward to subsequent Tax Periods.

However, certain unused losses from earlier periods in which the relief was not elected may continue to be carried forward, subject to the Corporate Tax rules.

Net interest expenditure

Similarly, net interest expenditure incurred during a period in which Small Business Relief is elected cannot be carried forward to subsequent Tax Periods.

This makes the election particularly important for businesses that have significant tax losses or interest-related deductions.

In other words, “zero Corporate Tax” is not the only factor to consider. The election should be assessed against the business's wider tax position.

Corporate Tax Compliance Is Still Required

Small Business Relief does not mean that an eligible business can ignore its Corporate Tax obligations.

Businesses claiming the relief still need to:

• Register for Corporate Tax with the FTA.
• Submit the required Corporate Tax Return.
• Make the Small Business Relief election in the relevant return.
• Maintain appropriate books, records, and supporting documents.
• Keep evidence supporting revenue and eligibility.
• Meet the applicable filing deadlines.
• Reassess eligibility for each Tax Period.

The FTA has specifically confirmed that eligibility for Small Business Relief does not eliminate the requirement to file a Corporate Tax Return. Instead, eligible businesses can benefit from a simplified return when the relief is properly elected.

Why the 2029 Extension Matters for UAE Businesses

The extension provides additional certainty for small businesses and start-ups operating within the AED 3 million revenue threshold.

The UAE's SME sector represents a major part of the country's economy. Recent Ministry of Economy & Tourism figures indicate that SMEs make up nearly 95% of companies operating in the UAE and contribute approximately 63% of GDP.

For founders and business owners, the extension can mean more time to:

• Plan business growth without an immediate 2026 relief expiry.
• Forecast Corporate Tax obligations.
• Improve accounting and record-keeping systems.
• Monitor revenue against the AED 3 million threshold.
• Review the impact of tax losses and interest expenditure.
• Make informed decisions before submitting each Corporate Tax Return.

What Should Your Business Do Now?

The extension to 2029 is good news, but businesses should not wait until the filing deadline to review their position.

1. Review your historical revenue

Check your revenue for every relevant Tax Period from June 2023 onward.

Remember: exceeding the AED 3 million threshold in a relevant previous period can affect eligibility for subsequent periods.

2. Monitor projected revenue

If your business is approaching AED 3 million, start monitoring revenue projections early.

A growing business should understand how its expected sales, contracts, and business expansion could affect future eligibility.

3. Review tax losses and interest expenditure

If your company has carried-forward Tax Losses or Net Interest Expenditure, assess the potential consequences before electing for Small Business Relief.

For some businesses, electing for the relief may be straightforward. For others, the decision requires a comparison between the immediate tax benefit and the value of available tax attributes.

4. Check your Free Zone and group status

Businesses operating in Free Zones or as part of larger corporate groups should verify whether any exclusion applies before making the election.

5. Do not assume “no tax” means “no filing”

Corporate Tax registration, return filing, record keeping, and other compliance requirements can still apply.

The FTA has made this point clear: Small Business Relief is a tax relief, not an exemption from Corporate Tax compliance altogether.

How Nuvance Consultants Can Help

At Nuvance Consultants, we help UAE small businesses, start-ups, and entrepreneurs navigate Corporate Tax requirements with practical, business-focused advice.

Our team can assist you with:

• Small Business Relief eligibility assessment
• AED 3 million revenue threshold review
• Historical revenue analysis
• Corporate Tax registration
• Small Business Relief election
• Corporate Tax Return preparation and filing
• Tax loss and interest expenditure considerations
• Ongoing Corporate Tax compliance
• Business tax planning and compliance reviews

If your business is approaching the AED 3 million threshold, or you are unsure whether electing for Small Business Relief is the right decision, it is better to review your position before the filing deadline.

Final Takeaway

The UAE's decision to extend Small Business Relief to 31 December 2029 provides welcome additional certainty for eligible small businesses and start-ups.

But the extension does not change the fundamental rules.

The AED 3 million revenue threshold remains unchanged, eligibility must be assessed against the current and relevant previous Tax Periods, and the relief must be actively elected through the Corporate Tax Return.

Most importantly, businesses should consider the wider consequences of the election, including the treatment of Tax Losses and Net Interest Expenditure.

Need help determining whether your business qualifies?

Contact Nuvance Consultants for professional assistance with UAE Corporate Tax, Small Business Relief, and ongoing tax compliance.