Key takeaways
- The Small Business Relief extension, by Ministerial Decision No. 131 of 2026, covers tax periods ending on or before 31 December 2029.
- Registration is mandatory whatever the revenue, and late penalties of AED 10,000 have already been assessed.
- Once the relief no longer applies, the standard regime taxes income above AED 375,000 at 9%.
What changed in Small Business Relief
Small Business Relief lets a UAE resident person elect to have no taxable income, so no corporate tax falls due. Revenue has to be at or below AED 3 million in the current and every earlier tax period, and the relief is still time-limited.
Ministerial Decision No. 131 of 2026, announced on 7 August 2026, moves the last covered tax period from 31 December 2026 to 31 December 2029.
Common mistakes with the relief
Three assumptions catch businesses that rely on the relief.
The relief is an exemption, so there is nothing to file.
If revenue is small, registration can wait.
If I qualify, the relief applies itself.
Relief is not exemption. It sets taxable income to zero, but you stay registered, file a return and claim the relief on it, so only the tax goes away.
Registration is mandatory for all UAE entities, whatever the revenue. Late penalties of AED 10,000 have already been assessed.
The election is yours to make on the return. Miss it and you lose the benefit for that period, even if you qualified.
Who the relief covers
These are the lines the law draws.
Two groups sit outside the relief entirely: members of large multinational groups, and Qualifying Free Zone Persons, who sit under a separate 0% regime.
Your tax once the relief ends
For a business relying on the relief, the question is what taxable income looks like once it ends. Revenue matters only for the AED 3M ceiling.
Before a period closes, timing and structure can still change the outcome, which is why we model it early. See our guide to Small Business Relief under UAE corporate tax; the wider picture sits on our Corporate Tax and VAT page.
The extension gives time to plan; it does not remove the need.
Confirm your registration, make the election deliberately each period and know your likely liability well before the relief stops.
