Corporate Tax
Small Business Relief Runs to 2029. That Is Three More Years, Not a Reprieve
Small Business Relief was built with an expiry date. Tax periods ending after 31 December 2026 were not going to have it, and every company relying on the relief was facing a first real corporate tax bill in 2027. Ministerial Decision 131 of 2026 moved that wall three years back, to 31 December 2029. Nothing else about the relief changed — which matters, because the part that costs people money was never the expiry date.
What the decision actually says
Ministerial Decision No. 131 of 2026 amends a single clause of Ministerial Decision No. 73 of 2023. The amended wording is that the AED 3 million revenue threshold applies to tax periods commencing on or after 1 June 2023 and continues to apply to subsequent tax periods ending on or before 31 December 2029.
That is the whole amendment. One clause, one date.
| Before | Now | |
|---|---|---|
| Revenue threshold | AED 3,000,000 | AED 3,000,000 — unchanged |
| Last eligible tax period | Ending on or before 31 Dec 2026 | Ending on or before 31 Dec 2029 |
| Who is excluded | QFZPs and large MNE group members | Unchanged |
| How it is claimed | Elected in the return | Unchanged |
| Effect on tax losses | Forfeited for the period elected | Unchanged |
Who can elect it
A resident taxable person whose revenue does not exceed AED 3 million in the relevant tax period and in every preceding one. Two groups are shut out regardless of size: Qualifying Free Zone Persons, and members of a multinational group with consolidated revenues above AED 3.15 billion.
The free zone exclusion catches people out. A free zone company that is not claiming QFZP status is not a QFZP and can elect the relief in the ordinary way. It is the 0% claim, not the address, that rules it out — which makes the two mutually exclusive rather than merely alternative.
The part that has not changed, and should be modelled
Electing relief means being treated as having no taxable income for that period. It also means forfeiting the tax losses arising in it. For a profitable company under AED 3 million that is a straightforward saving. For a loss-making one it is a transfer of value from the future to nowhere.
Take a company with AED 2.6 million of revenue and a loss of AED 400,000. It pays no tax either way. Elect relief and the AED 400,000 simply disappears; decline it and the loss carries forward against profit in 2028 or 2029, sheltering AED 36,000 of tax at 9%. The election is irreversible once the return is submitted, so it is a decision made once, on the basis of a forecast.
Three extra years makes the modelling more valuable, not less. A company that is loss-making now and expects to be profitable in 2028 has a longer runway to use carried-forward losses than it did a month ago. The case for declining relief in a loss year just got stronger.
What the relief does not excuse
Every obligation other than paying tax survives the election.
- Register. Relief does not remove the requirement to hold a corporate tax registration.
- File. The return is still due nine months after the year end, and the election is made inside it.
- Keep records. The revenue figure has to be supportable, which means books that reconcile.
- Watch the threshold. Revenue above AED 3 million in any period, including a past one, ends eligibility permanently — not just for the year it happened.
The 2029 cliff is real
An extension is not an abolition. A company that is still under AED 3 million and still electing relief in 2029 faces its first genuine corporate tax computation for the period beginning in 2030 — with no accumulated losses to set against it, because every year of relief threw them away.
The businesses that will handle that well are the ones treating the next three years as a run-up: books maintained to a standard that supports a real computation, the loss position tracked even while relief is claimed, and the election tested annually rather than renewed by habit.
Figures, thresholds and deadlines in this article were accurate on 21 September 2026. UAE tax rules change. This is general information, not advice on your circumstances — confirm your own position before acting.
Frequently asked
Is Small Business Relief automatic now that it runs to 2029?
No. It has never been automatic and the extension does not change that. It must be elected in the corporate tax return for each period. A company that qualifies but does not elect is taxed normally.
Can I change my mind after electing?
No. The election is irreversible once the return is submitted for that tax period. It can be evaluated afresh the following year, but the year already filed is closed.
My revenue went over AED 3 million once in 2024. Can I elect for 2026?
No. The condition is that revenue did not exceed AED 3 million in the relevant tax period and all previous ones. Crossing the threshold once ends eligibility for good, even if revenue falls back below it.
Does the extension change the AED 3 million threshold?
No. Ministerial Decision 131 of 2026 amended the date and nothing else. The threshold, the exclusions, the election mechanism and the effect on tax losses are all exactly as they were.
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