Small Business Relief has been extended to cover all tax periods ending on or before 31 December 2029, giving eligible businesses additional time to benefit from the scheme. The extension was announced by the UAE Ministry of Finance on 7 August 2026 under Ministerial Decision No. 131, and remains subject to conditions that are frequently misunderstood.
Businesses with annual revenue not exceeding AED 3 million remain eligible for simplified corporate tax compliance requirements, with the existing revenue threshold remaining unchanged. The relief applies to tax periods beginning on or after 1 June 2023 and now extends to periods ending on or before 31 December 2029. For small businesses and start-ups, this translates into a substantially reduced compliance burden, no requirement to file a full corporate tax return for eligible periods and revenue below 3 million are subject to a 0% corporate tax rate.
Small Business Relief is an election within the corporate tax regime, not an automatic exemption. The AED 3 million threshold applies to total revenue, including sales, foreign exchange, and asset gains. Crucially, UAE entities remain eligible only if they have never exceeded this threshold during any preceding year. Free zones and related-party entities still require strict scrutiny.
Confirming eligibility correctly for each relevant period to avoid unnecessary tax exposure. Structuring growth with the 2029 deadline in mind. Electing for the relief is not always the right decision. Business leaders carrying significant capital expenditures or accumulated tax losses may be better served remaining within the standard corporate tax regime, where deductions can be offset against future taxable income. Opting into relief forfeits that ability, easy to overlook when the headline benefit is a simplified filing process. Also, while small business relief exempts UAE entities from tedious documentation obligations, it never excuses them from respecting the strict arm's length principle.
The content presented in this document is intended for informational purposes only. It does not constitute investment advice, personalised recommendations, or tax guidance from W‑Conseil Group. The analyses and information reflect the understanding of the author at the date of preparation and may change according to economic and regulatory developments.
This publication references informations from Ministerial Decision No. 131, issued by the UAE Ministry of Finance (announced August 7, 2026). W‑Conseil Group relies on sources considered reliable and strives to provide high-quality information. However, no guarantee can be given regarding the accuracy or completeness of the content, which is provided for indicative purposes only. Information may be updated or adjusted without prior notice.
The information provided is for general guidance only and does not replace personalised advice. W‑Conseil Group cannot be held responsible for any errors, omissions, or interpretations arising from the use of this document.
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Prepared and published on Monday, August 17, 2026