The Ministry of Finance has extended Small Business Relief to tax periods ending on or before 31 December 2029, with the Dh3 million revenue limit unchanged. Qualifying businesses must still register, file and keep records, and electing the relief can cost them the right to carry forward losses.
UAE Small Business Relief 2029 is now confirmed: the Ministry of Finance announced on 7 August 2026 that tax periods ending on or before 31 December 2029 qualify, up from 2026. The Dh3 million revenue limit is unchanged. For eligible small companies, that means three more years of simplified corporate tax compliance.
Quick answer: Yes. Ministerial Decision No. 131 extends UAE Small Business Relief to tax periods ending on or before 31 December 2029. A resident business with revenue of Dh3 million or less can elect to be treated as having no taxable income. It must still register, file a return and keep records.
What is UAE Small Business Relief, and what has changed?
Small Business Relief is an optional corporate tax relief for small UAE businesses. A business that elects it is treated as having no taxable income for that period, so the 9 per cent corporate tax does not apply, according to DLA Piper's August 2026 briefing.
The change is the end date. Ministerial Decision No. 73 of 2023 applied the relief to tax periods ending on or before 31 December 2026, according to CMS. The Ministry of Finance moved that to 31 December 2029 on 7 August 2026, as reported by The National and Gulf News.
Definition: Small Business Relief. An election under Article 21 of Federal Decree-Law No. 47 of 2022 that treats an eligible business as having no taxable income for a tax period. Revenue, not profit, decides eligibility.
Who qualifies for Small Business Relief?
A business qualifies if it is a UAE resident person with revenue of Dh3 million or less, is not a Qualifying Free Zone Person (QFZP), and is not part of a very large multinational group. DLA Piper lists these conditions and notes that natural persons in business can qualify too.
Use the five checks below. We call this the Dh3 Million Relief Check.
| Check | Question to answer | Passes if | Source |
|---|---|---|---|
| 1. Residence | Is the taxpayer a UAE resident person, including a resident individual in business? | Yes | DLA Piper, Aug 2026 |
| 2. Revenue | Was revenue AED 3 million or less in this period and in earlier periods? [VERIFY look-back wording] | Yes | DLA Piper, Aug 2026 |
| 3. Free zone status | Is the entity a QFZP taxed at 0 per cent on qualifying income? | No | DLA Piper, Aug 2026 |
| 4. Group size | Is it part of a multinational group with consolidated revenue above AED 3.15 billion? | No | DLA Piper; CMS |
| 5. Period | Does the tax period end on or before 31 December 2029? | Yes | The National, 7 Aug 2026 |
Individuals are a separate case. The National reports that business owners fall within corporate tax only when turnover passes Dh1 million in a calendar year, so an individual between Dh1 million and Dh3 million is where the relief becomes relevant.
How is the Dh3 million revenue limit measured?
The limit applies to revenue, not profit, and revenue is determined under UAE applicable accounting standards, according to CMS. A company with Dh2.8 million of revenue and a loss is inside the limit. A company with Dh3.2 million of revenue and a small profit is outside it.
That makes bookkeeping the practical test. Owners near the limit should track revenue monthly, because one large invoice can move a business across the line.
Splitting a business to stay under the limit is a risk. CMS notes that the Federal Tax Authority (FTA) can counteract an advantage gained by artificially splitting activities.
What does Small Business Relief not remove?
It does not remove the duty to register, file or keep records. DLA Piper states that eligible businesses must still register for corporate tax, submit returns by the prescribed deadlines and maintain adequate financial records.
Returns and any tax are generally due nine months after the tax period ends. For a financial year ending 31 December 2025, the deadline was 30 September 2026, as reported by UAE Ahead citing the FTA.
| Obligation | What applies | Source |
|---|---|---|
| Registration | Required even if the relief is elected | DLA Piper, Aug 2026 |
| Annual return | Due within 9 months of the period end | UAE Ahead, 2026 |
| Late registration | AED 10,000 penalty [VERIFY on tax.gov.ae] | Mazeed, 2026 |
| Late filing | AED 500 a month for 12 months, then AED 1,000 [VERIFY on tax.gov.ae] | Mazeed, 2026 |
| Records | Kept for 7 years [VERIFY on tax.gov.ae] | FTA guidance |
Does electing the relief always save money?
No. Electing saves tax only when taxable profit would exceed Dh375,000, because the first Dh375,000 is already taxed at 0 per cent. It can also cost money, because CMS reports that tax losses cannot be carried forward from a period in which the relief is claimed.
The table shows three illustrative cases for one 12-month period. These are Consulting Media calculations with no other adjustments.
| Case | Taxable result | Tax without relief | Tax with relief | Effect of electing |
|---|---|---|---|---|
| A | AED 600,000 profit | AED 20,250 | AED 0 | Saves AED 20,250 |
| B | AED 300,000 profit | AED 0 | AED 0 | No saving |
| C | AED 250,000 loss | AED 0, loss carried forward | AED 0, loss lost | Gives up a deduction worth up to AED 22,500 at 9 per cent |
Before electing, run the Elect or Skip Test:
- Is taxable profit likely to exceed Dh375,000? If not, electing saves nothing.
- Is a loss likely that you would want to use in later years? If so, weigh the lost carry-forward.
- Do you rely on other reliefs or deductions? CMS reports these are not available for a period in which the relief is claimed.
Which tax periods does the extension cover?
The extension covers tax periods ending on or before 31 December 2029. For a company with a calendar-year financial year, that adds 2027, 2028 and 2029 to the periods already covered.
| Financial year ending | Covered? | Note |
|---|---|---|
| 31 December 2026 | Yes | Covered before and after the extension |
| 31 December 2027 to 31 December 2029 | Yes | New under the extension |
| 30 September 2029 | Yes | Non-calendar year, ends before the cut-off |
| 31 March 2030 | No | Ends after 31 December 2029 |
| Any period after 2029 | Not announced | No further decision reported [VERIFY] |
What this means for you
- Owners near Dh3 million: track revenue every month. Crossing the limit ends the relief for that period, and the test looks back at earlier periods.
- Profitable small firms: compare your taxable profit with Dh375,000 before assuming the relief helps.
- Loss-making start-ups: weigh the lost carry-forward before electing in a loss year.
- Free zone companies: a QFZP cannot use the relief, so the choice between regimes needs advice from a qualified tax adviser.
- All eligible businesses: keep the registration, nine-month filing date and records in place.
A simple order of work: confirm your registration status, run the Dh3 Million Relief Check, apply the Elect or Skip Test, diarise the filing date, and keep supporting records.
What we don't know yet
- The full text of Ministerial Decision No. 131 has not been reviewed for this article. Details come from the Ministry's announcement as reported and from legal and tax firm briefings.
- The mechanics of making the election, including where on the return it is made, have not been confirmed from an official source.
- How the revenue test treats related or connected entities has not been confirmed.
- No decision on periods after 31 December 2029 has been reported.
Conclusion
The extension gives eligible small businesses three more years of simpler corporate tax, but it is a choice with trade-offs, not an automatic exemption. Check eligibility each period, compare the saving with any lost losses, and keep filing.
Frequently asked questions
Has the UAE extended Small Business Relief to 2029?
Yes. The Ministry of Finance announced on 7 August 2026 that Ministerial Decision No. 131 extends the relief to tax periods ending on or before 31 December 2029. The previous end date was 31 December 2026. The Dh3 million revenue threshold remains the same, according to The National and Gulf News.
What is the revenue limit for Small Business Relief?
The limit is Dh3 million of revenue in the relevant tax period, and it is unchanged by the extension. It is measured on revenue, not profit, under applicable accounting standards. A business can be profitable or loss-making and still qualify, provided revenue stays at or below the limit.
Do I still need to register and file if I qualify?
Yes. DLA Piper confirms eligible businesses must still register for corporate tax, submit returns by the prescribed deadlines and keep adequate records. Returns are generally due nine months after the period ends. Relief changes how much tax is payable, not whether a return is filed.
Which businesses cannot use Small Business Relief?
Qualifying Free Zone Persons cannot use it, and neither can members of multinational groups with consolidated revenue above AED 3.15 billion, according to DLA Piper. Non-residents are also outside the relief, which is limited to resident persons. Businesses that artificially split activities risk FTA action.
Is electing the relief always the better choice?
No. If taxable profit is below Dh375,000, tax is already 0 per cent, so electing saves nothing. Electing can also mean losses are not carried forward and other reliefs are unavailable for that period, according to CMS. Compare both outcomes with an adviser before you elect.
What happens if my revenue passes Dh3 million?
You lose the relief for that period and pay corporate tax at 9 per cent on taxable income above Dh375,000. Because the test looks at earlier periods too, assume eligibility may not return in later years unless the decision text says otherwise [VERIFY].
Disclaimer: This article is general information, not legal, tax or financial advice. Rules can change and depend on individual circumstances. Consult a qualified tax adviser before making decisions.
