- The UAE Ministry of Finance has formally extended the Small Business Relief (SBR) window from 31 December 2026 to tax periods ending on or before 31 December 2029 under Ministerial Decision No. 131 of 2026.
- The gross annual revenue cap remains unchanged at strictly AED 3,000,000 in the relevant tax period and all previous tax periods.
- Eligible resident businesses electing the relief are treated as deriving zero taxable income, eliminating 9% corporate tax liability and complex tax adjustment computations.
- The extension provides crucial multi-year tax planning certainty for UAE start-ups, small enterprises, and professional sole practitioners.
- Businesses electing SBR must still complete annual Corporate Tax registration on EmaraTax and submit a simplified return before the statutory 9-month deadline.
Table of Contents (4 Sections)
The Statutory Extension Announcement & Commercial Context
The UAE Ministry of Finance issued Ministerial Decision No. 131 of 2026, officially amending Ministerial Decision No. 73 of 2023. This statutory instrument formally extends the operative timeline of Small Business Relief under Article 21 of Federal Decree-Law No. 47 of 2022 on Corporate Tax.
Under the original provisions of Ministerial Decision No. 73 of 2023, SBR was enacted to apply only to tax periods ending on or before 31 December 2026. Recognizing the vital role of micro, small, and medium enterprises (MSMEs) in driving the UAE's non-oil economic growth, the Federal Government extended the statutory relief through tax periods ending on or before 31 December 2029.
This landmark extension gives UAE entrepreneurs and small business owners three additional years of tax certainty, shielding emerging businesses with gross revenues of AED 3 million or less from corporate tax liabilities during their formative growth stages.
Unchanged Core Qualifying Parameters
While the timeline has expanded significantly through 2029, the fundamental statutory eligibility parameters remain strictly enforced:
Revenue Ceiling: Gross revenue across all commercial business streams must not exceed AED 3,000,000 in the current tax period AND all preceding tax periods starting on or after 1 June 2023.
Resident Person Only: SBR is available exclusively to UAE resident juridical entities (such as LLCs) or resident natural persons conducting commercial business activities.
Permanent Disqualifications: A company remains ineligible if it is a Qualifying Free Zone Person (QFZP) claiming 0% tax under Article 18, or if it belongs to an international corporate group subject to CbCR rules (consolidated group revenue of AED 3.15 billion or more).
Anti-Abuse Oversight: The FTA continues to actively audit corporate ownership structures to ensure businesses are not artificially partitioned into multiple corporate shells to evade crossing the AED 3,000,000 revenue cap.
Strategic Advice for Finance Leaders & Entrepreneurs
Integrity Chartered Auditors advises all eligible small business operators to take proactive administrative steps:
First, verify that your accounting system tracks gross revenue on a true accrual basis (or compliant cash accounting if turnover is under AED 3M) so that the threshold is never breached inadvertently.
Second, evaluate whether you have substantial initial tax losses: if early operational expenses resulted in large startup losses, electing SBR treats taxable income as zero rather than preserving tax losses to offset larger future profits once turnover exceeds AED 3M.
Third, ensure your entity completes EmaraTax Corporate Tax registration on time, avoiding the statutory AED 10,000 late registration penalty.
Practical Questions Regarding This Mandate
Does Ministerial Decision No. 131 of 2026 increase the AED 3,000,000 revenue ceiling?
No. The revenue threshold remains strictly at AED 3,000,000. Ministerial Decision No. 131 of 2026 extended the operative time window through 31 December 2029, without altering the financial turnover ceiling.
If our revenue was AED 2M in 2024, AED 2.8M in 2025, and AED 3.2M in 2026, can we claim SBR in 2027?
No. Once your revenue breaches the AED 3,000,000 ceiling in any tax period (such as 2026 in this example), your business permanently loses the ability to elect Small Business Relief for all future tax periods, even if revenue subsequently drops below AED 3M.
Do we need to apply for SBR in advance or elect it in the tax return?
There is no advance application. The SBR election is made annually within the standard Corporate Tax return submitted via EmaraTax within 9 months of your financial year-end.
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Majid Khalifa Almuhairi
Managing Partner · Integrity Chartered Auditors and Accountants, UAE