Good news for SMEs: Small Business Relief under UAE Corporate Tax has been extended to tax periods ending on or before 31 December 2029. Ministerial Decision No. 131 of 2026 pushes back the earlier 31 December 2026 cut-off, and the AED 3 million revenue threshold stays the same.
What the relief does
An eligible resident business can elect to be treated as having no taxable income for the period. In practice, its Corporate Tax liability is zero and the return is simpler.
Who can claim it
- UAE resident persons, including licensed freelancers and sole establishments.
- Revenue of AED 3 million or less in the current tax period and each previous one.
- Not available to Qualifying Free Zone Persons or members of large multinational groups.
What the relief does not do
- It is not automatic — you must elect it in your Corporate Tax return.
- It does not remove Corporate Tax registration or the duty to file a return on time.
- Tax losses from a relief year cannot be carried forward.
- You still need proper books of account to prove your revenue is under the threshold.
Watch the revenue line
The threshold is tested every year. A business that crosses AED 3 million in any single period loses the relief for that period and later ones. If you are growing close to the limit, plan ahead for standard Corporate Tax at 9% on profit above AED 375,000.
What to do now
- Check revenue for the current and previous tax periods.
- Keep clean accounts that can back up your revenue figure.
- Elect the relief in each return you file.
- Review the position if revenue is trending towards AED 3 million.
How Growbox Auditing can help: We can review the records and tax position relevant to a Small Business Relief election. Bookkeeping and tax filing are separate engagements. Contact our team to review your position.
This article is general information, not tax advice for your specific situation.