Small Business Relief in the UAE: Extended to 2029, Who Qualifies and What Still Applies
Last reviewed: By Kenobiz Solutions editorial team7 min read
Yes, Small Business Relief (SBR) has been extended. Ministerial Decision No. 131 of 2026 lets resident businesses whose revenue does not exceed AED 3 million keep electing the relief for tax periods ending on or before 31 December 2029. If you qualify, you are treated as having no taxable income for the period. You must still register, file a Corporate Tax return within 9 months and keep proper books, and the relief does not exempt you from e-invoicing.
Key facts
- 31 December 2029: SBR is available for tax periods ending on or before this date (Ministerial Decision No. 131 of 2026, signed on 29 July 2026, announced by the Ministry of Finance on 7 August 2026).
- AED 3 million: revenue must not exceed it in the tax period concerned and in every previous tax period, counting periods that started on or after 1 June 2023.
- 9 months: the deadline to file your Corporate Tax return after the end of the tax period, with or without SBR.
- 0% and 9%: without SBR, Corporate Tax is 0% on taxable income up to AED 375,000 and 9% above (Cabinet Decision No. 116 of 2022).
- 31 March 2027: SBR changes nothing for e-invoicing. Businesses below AED 50 million of revenue must appoint an accredited service provider by this date.
What is Small Business Relief in the UAE?
Small Business Relief is an election under Article 21 of the Corporate Tax Law. A resident business whose revenue does not exceed AED 3 million in the tax period, and in every previous one, can elect to be treated as having no taxable income for that period. It simplifies compliance but does not remove the duty to register or file.
The conditions come from Ministerial Decision No. 73 of 2023, issued in April 2023. The 2026 decision only moved the end date; it did not change the threshold or the conditions.
The key word is revenue, not profit. That is why SBR matters most to small, profitable businesses. Without the relief, Corporate Tax is 0% up to AED 375,000 of taxable income and 9% above. A consultancy with AED 2.8 million of revenue and AED 600,000 of taxable income would pay 9% × (600,000 − 375,000) = AED 20,250. With SBR, it pays nothing for that period. A company whose taxable income is below AED 375,000 would pay 0% anyway, so for it SBR mainly means simpler compliance.
The Ministry of Finance says 82% of UAE businesses are micro businesses with less than AED 3 million of annual turnover, so this relief is potentially relevant to most companies in the country.
Has Small Business Relief been extended to 2029?
Yes. Ministerial Decision No. 131 of 2026, signed on 29 July 2026 and announced by the Ministry of Finance on 7 August 2026, amends Ministerial Decision No. 73 of 2023 so the relief continues for tax periods ending on or before 31 December 2029. The AED 3 million threshold and the other conditions are unchanged.
Before this decision, the relief stopped with tax periods ending on or before 31 December 2026, which is why many older guides still show 2026. What counts is the end date of your tax period:
| Your financial year ends on | Last tax period that can use SBR | First period outside the extension |
|---|---|---|
| 31 December | 1 January to 31 December 2029 | The year ending 31 December 2030 |
| 30 June | The period ending 30 June 2029 | The period ending 30 June 2030 |
| 31 March | The period ending 31 March 2029 | The period ending 31 March 2030 |
Unless the rules are extended again, every SBR business returns to the normal Corporate Tax rules from its first tax period ending after 31 December 2029. Plan your accounting for that now rather than in 2029.
Who qualifies for Small Business Relief?
You can elect for Small Business Relief if you are a resident person for Corporate Tax, your revenue does not exceed AED 3 million in the tax period and in every previous tax period, you are not a Qualifying Free Zone Person, and you are not part of a multinational group with consolidated revenue above AED 3.15 billion.
Check each condition in turn:
- You are a resident person. Non-residents cannot elect. If you are unsure about your residence status, settle it with a tax agent first.
- Your revenue does not exceed AED 3 million in the tax period you want relief for.
- Your revenue did not exceed AED 3 million in any previous tax period, counting periods that started on or after 1 June 2023. This is the condition most guides underplay (see the next section).
- You are not a Qualifying Free Zone Person. Those companies have their own regime, 0% on qualifying income and 9% on the rest, and cannot combine it with SBR.
- You are not a member of a multinational enterprise (MNE) group whose consolidated group revenue exceeds AED 3.15 billion.
- You elect. The relief is optional and applies period by period.
If all six are true, SBR is available to you. Whether electing is the best choice for your situation is a question for an FTA-registered tax agent, because the election has consequences beyond the tax bill.
What happens if your revenue goes above AED 3 million in one year?
You lose the relief for that year and for every later year, even if revenue falls back below AED 3 million. The test covers the tax period concerned and every previous tax period starting on or after 1 June 2023, so a single year above the threshold ends your eligibility for all later periods under the current rules.
This is the "one bad year" trap. A one-off contract, a strong season or a merger of two activities into one company can push you over the threshold once, and the consequence lasts.
| Tax period | Revenue | Can you elect SBR? |
|---|---|---|
| 2024 | AED 2.6 million | Yes |
| 2025 | AED 3.2 million | No: above AED 3 million |
| 2026 | AED 2.7 million | No: 2025 exceeded the threshold |
| 2027 | AED 2.4 million | No: 2025 still counts |
If you are close to AED 3 million, watch your revenue as year-end approaches, and talk to a tax agent before you sign a contract that would push you over. From the first period you exceed the threshold, plan for Corporate Tax at 9% on taxable income above AED 375,000.
Do you still need to register, file and keep books under SBR?
Yes. Small Business Relief is an election, not an exemption from the system. You must register for Corporate Tax with the FTA, file a Corporate Tax return within 9 months of the end of each tax period, make the election for that period, and keep accounting records that support your revenue figure. The Ministry calls this simplified compliance.
- Registration. The Ministry of Finance states that all taxable persons, including free zone persons, must register for Corporate Tax.
- Filing. One return per tax period, within 9 months of its end. SBR does not change that deadline.
- The election. It is made for each tax period you want relief for. Check the current EmaraTax steps on the FTA website, or ask your tax agent to file it.
- Records. Keep your books, invoices and supporting documents for the periods set by the Tax Procedures Law, generally five years. If the FTA questions your revenue, your records are your evidence.
Does Small Business Relief exempt you from e-invoicing?
No. Small Business Relief is a Corporate Tax relief, and e-invoicing is a separate obligation for B2B and B2G transactions, whatever your VAT or Corporate Tax status. A business with revenue below AED 50 million must appoint an accredited service provider by 31 March 2027 and issue e-invoices from 1 July 2027, with or without SBR.
Many SBR businesses assume that "no Corporate Tax" means "no new obligations". It does not. The UAE e-invoicing system applies to any person conducting business in the UAE for B2B and B2G transactions, regardless of VAT registration, and free zone businesses are in scope. Our UAE e-invoicing guide explains the system, and who must comply covers the edge cases.
What it means for a small business:
- Deadlines: appoint an accredited ASP by 31 March 2027 and go live on 1 July 2027. See the full UAE e-invoicing deadlines.
- Provider: choose one from the official list of accredited service providers. Each must give you 100 free e-invoice exchange and reporting services per year.
- Fines: failing to implement on time, including not appointing an ASP, costs AED 5,000 per month or part of a month. See UAE e-invoicing penalties.
The e-invoicing readiness check tells you your phase and your next three actions in two minutes.
Why do your books still matter if you pay no Corporate Tax?
Because SBR depends on a revenue figure you must prove, one year above AED 3 million ends it, and the FTA can ask for your records. When the relief ends, after your last period ending on or before 31 December 2029, taxable income above AED 375,000 is taxed at 9%. Audit-ready books protect you either way.
Good books also make the e-invoicing switch easier: an e-invoice needs clean customer data, including TRNs, and correct VAT treatment on every line. If you still invoice from Word or Excel, now is the right time to move to proper software. Our comparison of the best accounting software in the UAE explains which tools keep your books audit-ready and handle e-invoicing, from simple cloud tools to ERPs, and our e-invoicing software comparison shows each vendor's official ASP status. For Corporate Tax in general, see our UAE Corporate Tax guide.
Frequently asked questions
Is Small Business Relief automatic?
No. It is an election you make for each tax period. If you do not elect, the normal Corporate Tax rules apply: 0% on taxable income up to AED 375,000 and 9% on the part above.
Can a free zone company use Small Business Relief?
Not if it is a Qualifying Free Zone Person. A Qualifying Free Zone Person has its own regime, 0% on qualifying income and 9% on the rest, and cannot elect Small Business Relief. Choosing between the two is a structuring question to settle with an FTA-registered tax agent.
Does Small Business Relief apply to VAT?
No. Small Business Relief only concerns Corporate Tax. VAT registration, VAT returns and tax invoices follow the VAT rules, and e-invoicing follows its own timetable, whatever your Corporate Tax position.
My financial year does not follow the calendar year. Which periods qualify?
Every tax period that ends on or before 31 December 2029. For a year ending on 30 June, the last eligible period is the one ending on 30 June 2029; the period ending on 30 June 2030 falls outside the extension.
Is it revenue or profit that counts for the AED 3 million test?
Revenue. The test looks at your income for the period, not your profit. A company with AED 2.8 million of revenue and a high margin can save a lot; a company with AED 3.2 million of revenue cannot elect, however small its profit.
Can a non-resident business claim Small Business Relief?
No. Under Article 21 of the Corporate Tax Law, only resident persons can elect for Small Business Relief.
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Related guides
Sources
Official texts and references used for this page:
- MoF — Ministry of Finance announces extension of Small Business Relief until 31 December 2029 — 2026-08-07
- Ministerial Decision No. 131 of 2026 — amends Ministerial Decision No. 73 of 2023 on Small Business Relief (MoF) — 2026-07-29
- MoF — decision on Small Business Relief for Corporate Tax purposes (Ministerial Decision No. 73 of 2023: conditions) — 2023-04-06
- Federal Decree-Law No. 47 of 2022 on Corporate Tax, consolidated (Art. 3 rates, Art. 21 Small Business Relief) — 2026-01
- MoF — 0% Corporate Tax up to AED 375,000 of taxable income (Cabinet Decision No. 116 of 2022) — 2023-02-01
- Ministerial Decision No. 244 of 2025 — e-invoicing implementation phases (MoF) — 2025
- MoF — UAE e-invoicing programme page (scope, benefits, 82% micro businesses) — consulted 2026-10-10
Last reviewed: By Kenobiz Solutions editorial team
General information, not tax or legal advice. For your specific case, consult an FTA-registered tax agent.