Small Business Relief Extended Until 31 December 2029

The UAE Ministry of Finance has issued Ministerial Decision No. 131 of 2026, extending the period during which Small Business Relief (“SBR”) is available under the UAE Corporate Tax regime.

Under the existing rules, the AED 3 million Revenue threshold for SBR applied to Tax Periods commencing on or after 1 June 2023 and ending on or before 31 December 2026. The new Ministerial Decision extends this period, with the threshold now continuing to apply to Tax Periods ending on or before 31 December 2029.

What does this mean?

This is a welcome development for start-ups and small businesses in the UAE. Eligible businesses now have an additional three years, until 31 December 2029, during which they may elect for SBR, provided their Revenue does not exceed AED 3 million in the relevant Tax Period or any previous relevant Tax Period, and the other eligibility conditions, which remain unchanged, are satisfied.

The extension is also particularly relevant for Free Zone Persons. Previously, a Free Zone Person electing for SBR could lose its eligibility to be treated as a Qualifying Free Zone Person (“QFZP”) for the relevant Tax Period and the following four Tax Periods. This could create a potential relief gap: SBR was available only for Tax Periods ending on or before 31 December 2026, while the restriction on QFZP status could continue beyond that date, potentially leaving the Free Zone Person unable to benefit from either regime during the intervening period. By extending SBR to Tax Periods ending on or before 31 December 2029, the new Decision significantly reduces the potential for such a gap and allows eligible Free Zone Persons to benefit from SBR for a longer period before transitioning to the QFZP regime.

Ministerial Decision No. 131 of 2026 was issued on 29 July 2026 and comes into effect on the day following its publication.

You can find the decision here.