Small Business Relief Extended to 2029: Who Qualifies and How to Claim It

What changed

On 7 August 2026 the Ministry of Finance announced Ministerial Decision No. 131, which amends the Small Business Relief rules so that the relief can be claimed for tax periods ending on or before 31 December 2029. Before the change, the last eligible tax periods were those ending by 31 December 2026. The AED 3 million revenue threshold and the other conditions stay the same.

What Small Business Relief gives you

• You are treated as having no taxable income for the tax period, so no Corporate Tax is payable.
• The return is simpler, because most taxable-income adjustments do not need to be calculated.
• You are not required to prepare transfer pricing documentation for that period.
• If your revenue is AED 3 million or less, you may also prepare your financial statements on a cash basis.

Who qualifies

You can elect Small Business Relief for a tax period if all of the following apply:

1. You are a resident person — a UAE company or a resident individual doing business.
2. Your revenue for the tax period is AED 3 million or less — and it was AED 3 million or less in every previous tax period as well.
3. You are not a Qualifying Free Zone Person.
4. You are not a member of a multinational group with consolidated revenue above AED 3.15 billion.

The test is on revenue — your gross income under accounting standards — not on profit. A business with AED 2.9 million of revenue and a large profit can qualify; a business with AED 3.2 million of revenue and a loss cannot.

A worked example

Try your own figures in our Corporate Tax calculator.

What you give up

A tax loss that arises in a period where you elect Small Business Relief cannot be carried forward. If you expect a significant loss this year — for example in the start-up phase — it can sometimes be better not to elect, so the loss can be used against future profits. This is worth modelling before you file.

The FTA can also deny the relief, and apply penalties, where a business has been artificially split to keep each part under AED 3 million.

How to claim it

1. Register for Corporate Tax on EmaraTax if you have not already done so — the relief does not replace registration.
2. Keep proper books so you can show your revenue for the period, and keep records for seven years.
3. Elect the relief in your Corporate Tax return for each tax period. It is not automatic.
4. File on time — within nine months of the end of the tax period. Late filing penalties apply even when no tax is due.

How Business Future CPA helps

We check eligibility, model whether electing is better than carrying losses forward, keep your books ready for the revenue test and file the return. See our Corporate Tax services, or read the full UAE Corporate Tax guide.