• Sep 22, 26
• dawnuser
• Corporate Tax
• 0 comment

Small businesses in the UAE have been given three more years of Corporate Tax relief. Under Ministerial Decision No. 131 of 2026, the Ministry of Finance has extended Small Business Relief (SBR) so that it can be claimed for tax periods ending on or before 31 December 2029. Previously, the relief was due to end with tax periods ending on 31 December 2026.

For start-ups, freelancers and SMEs that were planning for a 9% Corporate Tax charge from 2027, this changes the picture. But the conditions have not changed, and the relief is easy to lose.

What Small Business Relief does

SBR is not a separate 0% tax rate. An eligible resident person can elect, in its Corporate Tax return, to be treated as having no taxable income for the tax period. The result is no Corporate Tax payable, regardless of profit, and a simplified return.

Who qualifies

• Revenue of AED 3 million or less in the relevant tax period and in every previous tax period. The test is revenue, not profit.
• Resident persons, which can include UAE companies and individuals conducting business.
• Not excluded groups: Qualifying Free Zone Persons and members of large multinational groups cannot claim the relief.

The rule that catches businesses out

Eligibility cannot be reset. Once revenue exceeds AED 3 million in any tax period, the business cannot elect SBR in a later period, even if revenue falls back below the threshold. Growing businesses near the threshold should monitor revenue carefully and plan the timing of contracts and invoicing with care.

SBR is not an exemption from compliance

Businesses claiming the relief must still register for Corporate Tax, file a return within nine months of the end of each tax period, make the SBR election in that return and keep records that support their revenue figures. The FTA has repeatedly reminded taxpayers that relief does not remove the filing obligation.

Free zone companies: SBR or QFZP?

A free zone company cannot be a Qualifying Free Zone Person and claim SBR for the same period. For a small free zone business, SBR may be simpler, while the QFZP regime can suit larger businesses with qualifying income. The right choice depends on revenue, activities and growth plans.

What to do now

1. Confirm your revenue in every tax period since Corporate Tax began.
2. Check whether you are excluded, for example as a QFZP or member of a large group.
3. Make sure your bookkeeping supports the revenue figure you will declare.
4. Plan ahead if you expect to cross AED 3 million.
5. Keep filing on time and make the election in each return.

How Dawn Consultancy can help

We advise SMEs on SBR eligibility, prepare the supporting records and file Corporate Tax returns. See our Corporate Tax services, return filing and bookkeeping.

Not sure whether you qualify? Call +971 55 441 1036, email info@dawnconsultancy.com or contact us.

Source: Ministerial Decision No. 131 of 2026 issued by the UAE Ministry of Finance, as reported by Arabian Business.

This article is for general information and reflects the rules and announcements available at the date of publication. It is not tax or legal advice. Confirm the position for your business before acting.