UAE Extends Corporate Tax Small Business Relief to 2029

The UAE Ministry of Finance has extended Small Business Relief, the election that lets small resident businesses treat their taxable income as nil for corporate tax. Under Ministerial Decision No. 131 of 2026, it now applies to tax periods ending on or before December 31, 2029, three years beyond the original cut-off of December 31, 2026.

What changed and what didn't

• New end date: tax periods ending on or before December 31, 2029.
• Unchanged: revenue must be AED 3 million or less in the tax period and in each previous period.
• Unchanged: members of large multinational groups and qualifying free zone persons can't use it.
• Unchanged: it's an election you make on your return, not an automatic exemption.
• Unchanged: you must still register for corporate tax, file returns and keep records.

What it's worth

Without the relief, taxable income above AED 375,000 is taxed at 9%. A consultant's company with AED 1.5 million of revenue and AED 800,000 of profit would otherwise pay:

Electing Small Business Relief brings that to zero, and the extension means eligible businesses can plan on it through 2029 rather than for just one more year.

Freelancers

Individuals doing business in their own name only come into corporate tax once their business turnover passes AED 1 million in a calendar year. Below that, the relief isn't needed at all.

Tip: Crossing AED 3 million of revenue in any period ends eligibility for that period. If you're close to the line, plan invoicing and growth with your adviser before year-end.