The UAE has extended its Small Business Relief programme for corporate tax, giving eligible small businesses and startups an additional three years of certainty as the country’s corporate tax framework continues to mature. The move keeps the existing AED 3 million annual revenue threshold in place while expanding the relief to cover tax periods ending on or before 31 December 2029.
The change comes through Ministerial Decision No. (131), which updates the original rules introduced under Ministerial Decision No. (73) of 2023. Previously, the relief was scheduled to expire for tax periods ending on or before 31 December 2026. The latest amendment extends eligibility for businesses with tax periods beginning on or after 1 June 2023 and ending before the start of 2030.
For qualifying businesses, the relief effectively removes the corporate tax burden for the relevant tax period. Companies that elect to use the scheme are treated as having no taxable income, eliminating the need for complex tax calculations while reducing compliance requirements. However, the extension does not remove filing obligations. Eligible businesses must still submit simplified corporate tax returns to the Federal Tax Authority within the prescribed deadlines.
The election remains optional, and businesses that choose not to apply for the relief retain the ability to carry forward tax losses and eligible net interest expenditure, an important consideration for companies expecting future profitability or planning long-term tax strategies.
The eligibility criteria remain unchanged. Businesses must have annual revenue of AED 3 million or less to qualify. The relief is not available to Qualifying Free Zone Persons or companies that form part of multinational enterprise groups with consolidated annual revenue exceeding AED 3.15 billion. Those exclusions mean the programme continues to target locally owned small and medium-sized enterprises rather than larger corporate structures.
The extension provides greater certainty for entrepreneurs and SME owners who had been preparing for the relief to expire in 2026. With the AED 3 million threshold now locked in through the end of 2029, businesses have a clearer framework for financial planning as the UAE’s corporate tax regime evolves.
The decision also aligns with the UAE’s broader strategy of encouraging entrepreneurship while maintaining an internationally competitive tax environment. Since introducing federal corporate tax, the government has paired the new regime with measures intended to reduce compliance costs for smaller businesses, reflecting an effort to balance tax reform with continued support for the country’s startup ecosystem.
For many SMEs, the extension is less about reducing tax liabilities than improving predictability. Knowing the existing rules will remain in place for several more years allows founders to focus on growth, investment, and expansion without facing near-term uncertainty over changes to their corporate tax obligations.
