- Osome Blog UAE
- Small Business Relief Extended to 2029
UAE Extends Corporate Tax Relief for Small Businesses to 2029: What You Need to Know
- Modified: 9 September 2026
- 9 min read
- Taxes & Compliance
Ruth Dsouza
Author
Ruth Dsouza Prabhu is a content developer passionate about turning ideas into clear, compelling narratives. Drawing on her experience in marketing communications and lifestyle writing, she makes complex business topics understandable for UAE entrepreneurs. Her work spans strategy, storytelling, and thought leadership, delivering content that is both credible and impactful. Ruth’s articles empower business owners to gain actionable insights, make informed decisions, and confidently navigate their entrepreneurial journey.
Shahla Mohammad
Reviewer
Shahla Mohammad is a Senior Accountant at Osome, bringing extensive experience in financial reporting, bookkeeping, and compliance. She supports UAE businesses with accurate financial management and clear guidance on regulatory requirements. With a detail-oriented and practical approach, Shahla helps entrepreneurs maintain strong financial foundations, ensure compliance, and make informed decisions to support sustainable growth.
Corporate Tax relief for small businesses in the UAE, known as Small Business Relief, has been extended to tax periods ending on or before 31 December 2029, three years beyond the previous cut-off of 31 December 2026. The UAE Ministry of Finance (MoF) confirmed the change through Ministerial Decision No. 131. For eligible businesses, this means Small Business Relief can continue to be claimed for additional tax periods, subject to the existing eligibility conditions. Here is what has changed, what it is worth to you, and what to do next.
Key Takeaways
- Small Business Relief now applies to tax periods ending on or before 31 December 2029, extended from the previous deadline of 31 December 2026.
- The AED 3 million revenue threshold is unchanged and still applies to tax periods beginning on or after 1 June 2023.
- You still need to register for Corporate Tax and actively elect Small Business Relief on your return each year. Neither happens on its own.
What Is Small Business Relief Under UAE Corporate Tax?
Small Business Relief lets eligible UAE resident businesses treat their taxable income as nil for a tax period, provided their revenue stays within AED 3 million. Under Ministerial Decision No. 131, the UAE Ministry of Finance (MoF) has pushed the deadline for claiming it back by three years.
- Old deadline: tax periods ending on or before 31 December 2026
- New deadline: tax periods ending on or before 31 December 2029
- Introduced by: Ministerial Decision No. 73 of 2023
- Extended by: Ministerial Decision No. 131
Action needed for the extension itself: none; it applies automatically to businesses that already qualify
Corporate Tax registration: still required with the Federal Tax Authority (FTA), even where no tax is ultimately due
Small Business Relief was introduced to reduce the compliance load on smaller businesses and start-ups while the Corporate Tax system was still new. Instead of working through taxable income, adjustments, and deductions in full, an eligible business can elect Small Business Relief and report nil taxable income for the period, as long as it meets the conditions.
The MoF says the extension supports small businesses and start-ups as the UAE strengthens its position as a global investment destination. Small and medium-sized enterprises account for more than 94% of the UAE's businesses. They also contribute over 60% to the country's non-oil Gross Domestic Product (GDP), according to Ministry of Finance data. Keeping compliance costs down for this segment gives smaller businesses more time to build up their financial reporting capability before they eventually move to standard Corporate Tax calculations.
Your eligibility depends on revenue in the current and every previous tax period, so keeping clean, up-to-date records matters even while you are not paying tax. Accounting services from Osome keep your books audit-ready year-round, so you always know exactly where you stand against the AED 3 million threshold.
How Much Can You Save with Small Business Relief?
Under the UAE Corporate Tax Law (Federal Decree-Law No. 47 of 2022), taxable income is calculated using a business's accounting net profit, adjusted for Corporate Tax purposes. Take a business with AED 2.8 million in revenue that, once its net profit is adjusted this way, arrives at AED 600,000 in taxable income. The table below compares its Corporate Tax position with and without Small Business Relief.
Without Small Business Relief | With Small Business Relief | |
|---|---|---|
| Taxable income | AED 600,000 | Treated as nil |
| Tax calculation | 0% on the first AED 375,000, 9% on the remaining AED 225,000 | Not applicable |
| Corporate Tax due for the tax period | AED 20,250 | AED 0 |
| Estimated saving per tax period | AED 0 (standard Corporate Tax rates apply) | AED 20,250 |
Because the relief now runs through tax periods ending on or before 31 December 2029, a business in this position stands to save up to AED 60,750 across the three additional tax periods covered by the extension (2027, 2028, and 2029), compared with moving to standard Corporate Tax from 2027.
Corporate tax registration and filing, simplified
We handle your UAE corporate tax registration and filings accurately and on time, so you stay compliant without the stress.
Who Is Eligible and How Do You Claim Small Business Relief?
A UAE resident business qualifies for Small Business Relief if it meets all of the following, in the relevant tax period and every previous tax period since 1 June 2023:
- Revenue does not exceed AED 3 million in the current tax period and all previous tax periods.
- The business is not part of a Multinational Enterprise (MNE) Group with consolidated global revenue of AED 3.15 billion or more.
- The business is not a Qualifying Free Zone Person (QFZP).
- The business has not artificially split its operations into smaller entities purely to stay under the AED 3 million threshold.
If revenue exceeds AED 3 million in any relevant tax period, the business will no longer qualify for Small Business Relief in subsequent Tax Periods, even if revenue later falls back below the threshold. If your business does not meet these conditions, the standard Corporate Tax rates apply instead: 0% on taxable income up to AED 375,000, and 9% above that.
The 31 December 2029 cut-off is based on your tax period end date, not the calendar year. If your financial year does not end in December, check your own tax period end date against this cut-off rather than assuming it lines up with the calendar year.
What stays the same?
Only the deadline has changed. Everything else about Small Business Relief is unchanged, as shown below.
Element | Before Ministerial Decision No. 131 | After Ministerial Decision No. 131 |
|---|---|---|
| Relief available until | Tax periods ending on or before 31 December 2026 | Tax periods ending on or before 31 December 2029 |
| Revenue threshold | AED 3 million | AED 3 million |
| Threshold applies from | Tax periods beginning on or after 1 June 2023 | Tax periods beginning on or after 1 June 2023 |
| MNE Group exclusion | Applies | Applies |
| QFZP exclusion | Applies | Applies |
How do you claim Small Business Relief?
You elect Small Business Relief on your Corporate Tax return when you file, within the standard nine-month filing window after your tax period ends.
- Register for Corporate Tax through EmaraTax, the UAE's official online tax portal, if you have not already. Registration is required regardless of whether tax is ultimately due, and late registration carries a penalty of AED 10,000.
- Confirm your revenue for the current and all previous tax periods sits at or below AED 3 million, calculated using UAE accounting standards and including all income reported in your financial statements.
- File your Corporate Tax return and elect Small Business Relief within it. You cannot go back and claim it after the filing deadline has passed.
- Keep your bookkeeping current even while electing the relief. Small Business Relief simplifies your tax position, not your record-keeping obligations, and you will need clean records if your revenue nears the threshold in a future period.
For a company with a 31 December financial year, the return covering the tax period ending 31 December 2025 is due on 30 September 2026, nine months later.
Electing Small Business Relief also means giving up certain benefits for that tax period, including interest deductions and the ability to carry forward tax losses. If your business has significant deductible expenses or losses to carry forward, it is worth weighing whether standard filing suits you better for that period. Osome can help you work out which option leaves you better off.
Selecting the wrong option on your return, or missing the filing window, can be costly to fix after the fact. Osome's Corporate Tax Filing service handles your registration, election, and submission accurately and on time, so nothing falls through the cracks.
How Osome Can Help
Working out whether your business still qualifies for Small Business Relief, and staying on top of registration and filing deadlines, takes ongoing attention as your revenue changes year to year. Osome helps UAE founders and small businesses with Corporate Tax registration, return filing, and bookkeeping, so you always know where you stand against the AED 3 million threshold well before your filing deadline. Explore our accounting packages to keep your Corporate Tax compliance on track.
Summary
The extension to 31 December 2029 gives eligible small businesses several more years of paying zero Corporate Tax under a simplified process, rather than facing a shift to standard filing in 2027. Use the extra time to keep your bookkeeping in order and check your revenue against the AED 3 million threshold each year, so you know exactly where you stand whenever your circumstances change.