The UAE Ministry of Finance has extended a major tax break for small businesses. Giving entrepreneurs and startups several more years of relief from corporate tax compliance.
The UAE Ministry of Finance has extended Small Business Relief for Corporate Tax until tax periods ending on or before 31 December 2029. Eligible UAE resident businesses with annual revenue below AED 3 million can continue benefiting from simplified corporate tax treatment, giving startups and SMEs additional time to grow while reducing compliance obligations.
What Was Announced for Small Business?
The Ministry of Finance has issued Ministerial Decision No. 131. Extending the period during which eligible businesses can claim Small Business Relief to tax periods ending on or before December 31, 2029. The decision amends earlier provisions of the Ministerial Decision on the Taxation of Corporations and Businesses.
Small Business Relief was originally introduced to reduce the corporate tax compliance burden on smaller businesses and start-ups. Without this extension, the relief was set to expire for tax periods ending after December 31, 2026.
Who Qualifies for Corporate Tax Relief for?
The good news for small business owners: the eligibility rules have not changed. The existing AED 3 million annual revenue threshold, originally set under Ministerial Decision No. 73 of 2023, remains unchanged. It continues to apply to tax periods beginning on or after June 1, 2023. In simple terms:
- Your business must be a UAE resident taxable person
- Your revenue must stay below AED 3 million in the relevant tax period, and in previous tax periods, to qualify
- You can now continue claiming the relief for tax periods ending on or before December 31, 2029, instead of the relief stopping at the end of 2026
- Free zone persons benefiting from the 0% qualifying income regime and members of multinational enterprise groups remain excluded from this relief, as under the original rules
Why Does This Matters for Small Business Owners?
For a small business, qualifying for this relief means being treated as if it earned no taxable income for that period. It is along with lighter compliance requirements overall. In addition, extending the deadline by three extra years gives startups and small companies more room to grow before they need to fully step into standard corporate tax compliance.
Wrap Up: Decision is meant to support small businesses
According to the Ministry of Finance, the decision is meant to support small businesses and startups. It will help to improve the business environment, and help entrepreneurs grow and expand. It also reflects the UAE’s wider effort to stay competitive as a destination for entrepreneurs and small business owners.
If your business currently claims, or plans to claim, Small Business Relief, this extension is worth factoring. It will mark into your longer-term tax and compliance planning, since you now have a clearer runway through 2029.
