If you run a UAE company under AED 3 million in revenue, the tax planning you started for 2027 just changed. The Ministry of Finance has extended Small Business Relief by three years, so the 0% arrangement many SMEs assumed was ending in 2026 now runs to the end of 2029. Anyone who was reserving cash for a 9% bill next year needs to revisit that plan.
TL;DR: Ministerial Decision No. 131 of 2026 extends UAE Small Business Relief from tax periods ending on or before 31 December 2026 to those ending on or before 31 December 2029. The AED 3 million revenue threshold is unchanged. Eligible resident businesses can keep electing for 0% corporate tax for three more years. Free zone persons and large multinational groups still cannot use it.
What the UAE Changed
The relief's expiry date moved. Ministerial Decision No. 131 of 2026 amends the original Ministerial Decision No. 73 of 2023 and pushes the sunset from tax periods ending on or before 31 December 2026 out to those ending on or before 31 December 2029 (UAE Ministry of Finance, 2026). Nothing else about how the relief works has changed.
The Ministry issued the decision on 29 July 2026 and confirmed it publicly on 7 August (The National, 2026). It framed the move as support for the segment that makes up more than 94% of UAE businesses and over 60% of non-oil GDP.
For an eligible business, the practical effect is three extra years of electing to pay no corporate tax. The relief was always a temporary bridge for young and small companies. That bridge is now longer.
Who Still Qualifies for Small Business Relief?
The eligibility test is the same as before. A resident taxable person can elect for the relief in any tax period where its revenue does not exceed AED 3 million, provided it also stayed at or below AED 3 million in every previous relevant tax period (Federal Tax Authority, 2026).
That "previous periods" condition matters. Once your revenue crosses AED 3 million in a single period, you lose access to the relief permanently, even if turnover later drops back below the line. It is a one-way door, not an annual reset.
Two groups are excluded regardless of size. Qualifying Free Zone Persons claiming the 0% free zone rate cannot also claim Small Business Relief, and members of multinational groups within scope of the global minimum tax are out too. We cover the free zone route in our guide to keeping the 0% free zone rate. Our eligibility walkthrough sets out the full conditions.
How Does the Relief Actually Save You Tax?
Small Business Relief treats a qualifying business as having no taxable income for the period. You elect it on your corporate tax return, and the result is a zero liability rather than a reduced one (PwC UAE Tax Summary, 2026).
That is more generous than the standard AED 375,000 band. Without the relief, a profitable business pays 0% on its first AED 375,000 of taxable income and 9% on everything above. Take a company with AED 900,000 of taxable income: under the standard rules it pays 9% on AED 525,000, which is AED 47,250. Under Small Business Relief that same company pays nothing.
The businesses that gain most are the profitable ones sitting just under the AED 3 million revenue line. In our experience, those are the companies that had already started budgeting for a real tax bill in 2027 and can now redeploy that cash for three more years.
Planning for Life After the Relief
You should still do it, but the timeline has shifted. The relief still ends, only later. A company with a December year-end now keeps 0% through the period ending 31 December 2029 and files its first taxable return for 2030. A June year-end keeps it through the period ending 30 June 2029.
The trade-off inside each relief period has not changed either. When you elect the relief, any tax loss or disallowed net interest that arises in that period cannot be carried forward (FTA Small Business Relief Guide, 2023). Electing in a loss-making year still wastes that loss, so a year where you expect to be in the red is often a year to skip the election and file normally.
What we see most often is owners treating the extension as a reason to stop tracking the numbers. The better response is the opposite. Three more years of clean bookkeeping and an accurate forecast means that when the relief does end, your first real tax computation is routine rather than a scramble. Our year-end planning checklist covers what to have ready 90 days out.
What Should You Do Before Your Next Filing?
Confirm three things. First, check whether your current and past periods have all stayed at or below AED 3 million, because that decides whether you can still elect. Second, if you had modelled a 2027 tax bill, update the plan to reflect the new 2029 horizon. Third, remember the election is made period by period on the return, so it is a live decision each year, not a one-off.
One question clients always ask is whether the extension is automatic. It is not. You still have to elect the relief on each eligible return; the decision simply keeps that option open for longer. Registration and filing remain mandatory whether you elect or not, on the usual nine-month deadline after your period end, which we explain in our first corporate tax return guide.
Frequently Asked Questions
How long is UAE Small Business Relief available now?
Until tax periods ending on or before 31 December 2029, under Ministerial Decision No. 131 of 2026. That is a three-year extension from the previous cut-off of 31 December 2026. The Ministry of Finance can revisit the date again before then, but as it stands eligible businesses have relief available for three more years.
Did the AED 3 million revenue threshold change?
No. The AED 3 million (about $816,000) revenue limit set under the original 2023 decision is unchanged. Your revenue must stay at or below AED 3 million in the relevant period and in every previous relevant period to keep access to the relief.
I already exceeded AED 3 million once. Can the extension help me?
No. Crossing AED 3 million in any tax period removes access to Small Business Relief for good, and the extension does not reset that. If your revenue passed the threshold in an earlier period, you move to the standard regime: 0% on the first AED 375,000 of taxable income and 9% above.
Can free zone companies use the extended relief?
No. A Qualifying Free Zone Person on the 0% free zone rate cannot claim Small Business Relief, and that exclusion is unchanged by the extension. Free zone businesses rely on the qualifying income rules instead. Mainland resident SMEs are the main users of the relief.
Do I still need to file a corporate tax return if I claim the relief?
Yes. Registration and annual filing are mandatory for every taxable person, relief or not. When you elect Small Business Relief you still submit a return, you simply report no taxable income for that period. The deadline stays nine months from your financial year-end.
Not sure whether your business still qualifies, or how the extension changes a plan you already built for 2027? Get in touch - we work with UAE SMEs across mainland and free zones, and can check your revenue history, confirm your election each year, and map out when the relief runs out for your year-end.