The UAE has extended its Small Business Relief (SBR) regime under the Corporate Tax system until 31 December 2029.
The extension was introduced through Ministerial Decision No. 131 of 2026 and gives eligible small businesses and start-ups an additional three years to potentially benefit from the relief.
Importantly, the key eligibility threshold remains unchanged:
Revenue must not exceed AED 3 million for the relevant Tax Period and all previous relevant Tax Periods.
For eligible businesses, Small Business Relief can significantly reduce the Corporate Tax burden. However, the relief is not automatic, and businesses should carefully review whether they qualify.
What is Small Business Relief?
Small Business Relief was introduced under Article 21 of the UAE Corporate Tax Law to support smaller businesses and reduce their Corporate Tax and compliance burden.
Where the relevant conditions are met and the relief is elected, the business is treated as having no Taxable Income for the relevant Tax Period.
In practical terms, this may mean that no Corporate Tax is payable for that period.
The new extension allows eligible businesses to continue benefiting from this treatment for qualifying Tax Periods ending on or before 31 December 2029.
Who May Qualify?
A UAE Resident Person may generally elect for Small Business Relief where its Revenue does not exceed AED 3 million for the relevant and previous relevant Tax Periods.
However, certain businesses are excluded, including:
For Free Zone companies in particular, the company’s actual Corporate Tax status should therefore be reviewed before assuming that Small Business Relief is available.
Revenue – Not Profit
One of the most important points is that the AED 3 million threshold relates to Revenue, not profit.
For example:
A business with Revenue of AED 2.8 million and profit of AED 1 million may potentially qualify.
By contrast, a business with Revenue of AED 3.2 million and profit of only AED 200,000 would exceed the threshold and would not qualify.
Businesses approaching the AED 3 million Revenue level should therefore monitor their position carefully.
What Happens if Revenue Exceeds AED 3 Million?
The Revenue threshold does not simply reset each year.
If Revenue exceeds AED 3 million in a relevant Tax Period, the business cannot regain eligibility in a later period merely because Revenue subsequently drops below the threshold.
For growing businesses, this makes forward planning particularly important.
Small Business Relief is Not Automatic
Businesses should also be aware that Small Business Relief does not apply automatically.
An eligible taxpayer must elect for the relief in its Corporate Tax Return.
Where otherwise required, the business must still:
A business may therefore have no Corporate Tax payable while still having ongoing Corporate Tax compliance obligations.
What Should Businesses Do Now?
The extension until 2029 provides welcome additional certainty, but businesses should not simply assume that the relief applies.
They should review:
Key Takeaway
The extension of Small Business Relief until 31 December 2029 is positive news for UAE entrepreneurs, start-ups and smaller businesses.
However, businesses should remember that:
Businesses should therefore use the extension as an opportunity to review their current Corporate Tax position and confirm that Small Business Relief is both available and properly claimed.
How We Can Assist
If you would like to understand how the extension of the UAE Small Business Relief until 2029 could benefit your business, or whether your company meets the relevant eligibility requirements, please contact our team at Meyer-Reumann & Partners at verena@meyer-reumann.com.
We would be pleased to assist you in assessing your Corporate Tax position, identifying potential relief opportunities, reviewing past filings and ensuring that your business remains compliant while making full use of the available UAE Corporate Tax benefits.
*This article is intended for general informational purposes only and does not constitute legal or tax advice.
