UAE Small Business Relief 2029 is now the operative deadline. The Ministry of Finance announced on 7 August 2026 that Ministerial Decision No. 131 of 2026 extends the window for electing Small Business Relief to Tax Periods ending on or before 31 December 2029. The AED 3 million revenue threshold, set under Ministerial Decision No. 73 of 2023, has not changed. Qualifying Free Zone Persons and members of Multinational Enterprise Groups with consolidated revenue above AED 3.15 billion still cannot claim the relief, and every eligible business must actively elect it in its Corporate Tax return for each period.
- Announced: 7 August 2026 by the Ministry of Finance
- Legal basis: Ministerial Decision No. 131 of 2026, amending Ministerial Decision No. 73 of 2023
- New eligibility window: Tax Periods ending on or before 31 December 2029, up from 31 December 2026
- Revenue threshold: AED 3 million, unchanged
- Excluded: Qualifying Free Zone Persons and members of Multinational Enterprise Groups above AED 3.15 billion consolidated revenue
- Election: Required in the Corporate Tax return for every relevant Tax Period, never automatic
What Ministerial Decision No. 131 of 2026 Changes
Small Business Relief was introduced under Ministerial Decision No. 73 of 2023 and originally applied to Tax Periods commencing on or after 1 June 2023 and ending on or before 31 December 2026. Ministerial Decision No. 131 of 2026 replaces that end date. The relief now continues to apply to Tax Periods ending on or before 31 December 2029. Nothing else in the underlying rule changes. The revenue test, the exclusions, and the requirement to elect the relief each period all carry over exactly as before.
| Rule | Under MD 73 of 2023 (original) | Under MD 131 of 2026 (current) |
|---|---|---|
| Eligible Tax Periods end by | 31 December 2026 | 31 December 2029 |
| Revenue threshold | AED 3 million | AED 3 million, unchanged |
| Eligibility starts from | Tax Periods commencing on or after 1 June 2023 | Same, unchanged |
| Election required each period | Yes | Yes, unchanged |
The AED 3 Million Threshold Has Not Moved
Some businesses reading the headline assume the extension comes with a higher revenue cap. It does not. The AED 3 million threshold set under Ministerial Decision No. 73 of 2023 applies exactly as before. This is gross revenue for the Tax Period, not net profit, and it is measured against the business’s own financial statements prepared under IFRS or another accepted standard, consistent with the FTA’s Small Business Relief guide. A business sitting just above AED 3 million in revenue gains nothing from this decision. What changes is how many more years a business under the cap can keep using the relief.
Who Cannot Claim Small Business Relief
Two categories remain excluded regardless of how low their revenue is.
Qualifying Free Zone Persons. A Qualifying Free Zone Person already benefits from a 0% rate on qualifying income under the Free Zone regime. The two regimes are mutually exclusive, so a business cannot hold QFZP status and elect Small Business Relief in the same period. A free zone company that has not met the qualifying conditions, or that is taxed under the standard rules, is not affected by this exclusion and can qualify for Small Business Relief like any other resident business under the cap. Businesses unsure of their standing should check our guide on losing Qualifying Free Zone Person status before assuming either regime applies.
Members of Multinational Enterprise Groups. A business that belongs to a group with consolidated group revenue above AED 3.15 billion cannot elect Small Business Relief, even if that specific entity’s own revenue is well under AED 3 million. This threshold mirrors the Country-by-Country Reporting definition of an MNE Group and exists to stop large groups from routing income through small UAE entities to access relief meant for genuinely small businesses.
Relief Is Never Automatic
Falling under AED 3 million in revenue does not switch Small Business Relief on by itself. The eligible business must actively elect the relief inside its Corporate Tax return for each relevant Tax Period through EmaraTax. Skip the election in a given period and standard Corporate Tax rules apply for that period, including the 0% rate up to AED 375,000 and 9% above it, along with normal loss and interest deduction rules. There is no default status that carries forward. Our guide to applications and elections covers how this election sits alongside other Corporate Tax elections available to Taxable Persons.
Electing the relief also has a trade-off worth weighing before filing. A business that elects Small Business Relief is treated as having no taxable income for that period, which means it cannot deduct or carry forward interest expense, and cannot utilize tax losses from that period. For a business with meaningful interest costs or losses to carry forward, running the numbers both ways before electing is worth the extra ten minutes.
The Look-Back Trap
This is the part businesses miss most often. The AED 3 million test does not only look at the current Tax Period. It looks at the current period and every previous relevant Tax Period going back to 1 June 2023. If revenue exceeded AED 3 million in even one of those earlier periods, the business is disqualified from electing Small Business Relief in the current period, no matter how far under the cap it is now.
For example, a business that recorded AED 3.4 million in revenue for its Tax Period ending in 2024, then dropped to AED 2.1 million in 2025 and expects similar revenue through 2029, still cannot elect Small Business Relief for 2025 onward. The 2024 breach closes the door for every subsequent period covered by this relief, even with the extension to 2029.
What Businesses Near the Threshold Should Do Now
- Reassess eligibility for every Tax Period on its own, rather than assuming last year’s approved status still holds
- Check revenue against the AED 3 million line as early as possible in the financial year, not at filing time
- Review every prior Tax Period since 1 June 2023 for a breach before assuming the current period qualifies
- Confirm QFZP status has not changed, since the two regimes cannot be combined
- Check group-level consolidated revenue if the business sits inside a larger corporate structure
- Compare the numbers with and without the election before filing, given the loss and interest deduction trade-off
Businesses that are unsure where they stand, particularly those hovering close to AED 3 million or sitting inside a wider group structure, should get their eligibility reviewed before the Corporate Tax return is filed rather than after. Our team handles this assessment alongside Corporate Tax return filing for businesses across the UAE.