UAE Extends Corporate Tax Relief for Small Businesses Until the End of 2029

The Ministry of Finance of the UAE has announced an update to its Small Business Relief (SMR) regime, extending it through the tax period ending on or before 31st of December 2029.

As a major part of its efforts to support startups and small businesses, the UAE’s Ministry of Finance has extended the Small Business Relief till December 31, 2029. The update was introduced under the UAE’s Corporate Tax relief regime, allowing small businesses to continue benefiting from corporate tax exemptions that are subject to the applicable conditions. Thus, small businesses are required to understand important information, including eligibility requirements and how to claim it.

What is the Small Business Relief?

Small Business Relief is a UAE tax provision under its Corporate Tax Law, particularly under Article 21 and Ministerial Decision No. 73 of 2023. It is specifically introduced to support startups, small businesses, and freelancers working in the UAE.

Businesses that qualify under this law can benefit from Corporate Tax relief on their taxable income for a relevant tax period, which is subject to applicable conditions.

In addition, this policy was updated by implementing the new Ministerial Decision No. 131 of 2026, extending the Small Business Relief period to on or before December 31, 2029.

Upgrades to the UAE Small Business Relief in 2026

The Ministry of Finance of the UAE, on August 7, 2026, announced updates regarding the Small Business Relief through Ministerial Decision No. 131 of 2026, amending the previous Ministerial Decision No. 73 of 2023.

Under this amendment, the period of the Corporate Tax relief for small businesses is extended from December 31, 2026, to on or before December 31, 2029.

As the UAE extends the Corporate Tax relief period, it should be noted that the threshold remains the same. This means that businesses that have annual revenues of up to or under AED 3 million for the relevant tax period and all tax periods before that will be treated as non-taxable. This is subject to specific conditions and requirements of the UAE.

Who Can Claim the Small Business Relief Regime?

The UAE Corporate Tax relief framework can be claimed by both natural persons (residents conducting business activities) and juridical persons (mainland companies and specific free zone entities).

Additionally, Qualifying Free Zone Persons (QFZPs) and businesses with annual revenues of over AED 3 million in the relevant tax period or in all the last ones are not eligible, which means they cannot benefit from the Small Business Relief regime. It also excludes businesses that are members of a Multinational Enterprise (MNE) group that has a joined annual revenue of over 3.15 billion.

How Does UAE Small Business Relief Work?

The UAE Corporate Tax Relief for small businesses does not automatically apply to eligible entities. If your business falls under the eligible category, as UAE’s Federal Tax Authority (FTA) has mandated, you must elect to apply for the relief. It must be done during the submission of your Corporate Tax return through the official EmaraTax portal.

Another thing to note is that even if your business’s annual revenues, as a juridical person, are below AED 3 million, you are still required to register for Corporate Tax with the Federal Tax Authority (FTA) and get a Tax Registration Number (TRN). On the other hand, natural persons are required to register when their revenues cross AED 1 million.

The Process of Electing for Small Business Relief in UAE

Follow the step-by-step process given below for electing for Small Business Relief in the UAE:

1. Verify Eligibility

Make sure that you are an eligible UAE resident, whether natural or juridical, with yearly revenues of AED 3 million or less. Also, remember that the permanent business setups of non-residents may not qualify for the small business Corporate Tax Relief.

Also, ensure that you are not a member of a Qualifying Free Zone Person or a member of a Multinational Enterprise (MNE) group with combined revenue of over AED 3.15 billion.

2. Corporate Tax Registration

Complete your UAE Corporate Tax registration before proceeding further in the process to maintain regulatory compliance. If you have already registered, make sure that your TRN is active.

3. Prepare Financial Documents

Gather your necessary documents, including:

• Sales Invoices and Receipts
• Bank Statements
• Commercial Agreements
• Accounting Ledgers
• Licensing and Registration

4. Fill Out the Corporate Tax Return

Visit the EmaraTax portal and select the tax return for the relevant financial period. Review your taxpayer details before entering your financial accounting data. Then, upload the needed financials and supporting documents as per the requirements.

5. Elect for Small Business Relief

In the Corporate Tax Return form, find the “Elections” section. In that box, submit your answer as “Yes,” indicating you would like to elect for Small Business Relief.

6. Review, Declare, and Submit

For the last step, review the page and complete any missing details or correct errors, if any, before submitting it. After submission, keep the reference number and acknowledgement saved for record-keeping.

Important Note: For Small Business Relief, you are required to make the election after every single tax period.

Also Read: What Is TAQA Vendor Registration? Process and Requirements

Conclusion

With the implementation of the Ministerial Decision No. 131 of 2026, the UAE extends Corporate Tax relief to or before December 31, 2029. This means small eligible businesses can continue to benefit from the Small Business Relief regime. Thus, they must know the eligibility requirements, how it works, and the process of electing for the relief.

If you need professional assistance regarding eligibility and the process of electing for Small Business Relief, you can connect with Arabian Wingz. As a business setup and financial advisory firm in the UAE, we guide businesses through the overall process, including Corporate Tax registration and Corporate Tax return filing. Thus, consider us your trustworthy partner for personalized expert assistance.