Small Business Relief extended to 2029: who qualifies and what you still file

Small Business Relief (SBR) now applies to tax periods ending on or before 31 December 2029. If your revenue is AED 3 million or less in the current tax period and every previous one, you can elect to be treated as having no taxable income, so no corporate tax is due. You still need to register for corporate tax and file a return every year.

Key points

• Ministerial Decision No. 131 of 2026, issued in August 2026, extends SBR to tax periods ending on or before 31 December 2029. The previous end date was 31 December 2026.
• The test is revenue of AED 3 million or less in the relevant tax period and in all previous tax periods.
• SBR is not automatic. You elect it in your corporate tax return.
• Qualifying Free Zone Persons (QFZPs) and members of multinational enterprise (MNE) groups cannot use it.
• Registration, a yearly return and proper books are still required. Late registration costs AED 10,000.

What changed in August 2026

SBR was introduced by Ministerial Decision No. 73 of 2023. It covered tax periods starting on or after 1 June 2023 and ending on or before 31 December 2026. For a company with a calendar financial year, that meant the relief would stop after the 2026 year.

The Ministry of Finance (MoF) has now pushed the end date to 31 December 2029. The conditions have not been loosened. The same revenue test and exclusions apply. What you gain is three more years of relief, as long as your revenue stays under the limit.

Here is how that works for a business with a calendar financial year:

Financial year	Tax period ends	SBR available if revenue test is met?	Return and payment due
2025	31 Dec 2025	Yes	30 Sep 2026
2026	31 Dec 2026	Yes	30 Sep 2027
2027	31 Dec 2027	Yes	30 Sep 2028
2028	31 Dec 2028	Yes	30 Sep 2029
2029	31 Dec 2029	Yes	30 Sep 2030
2030	31 Dec 2030	Not under current rules	30 Sep 2031

If your financial year ends on another date, the same logic applies. A year ending 30 June 2029 is covered. A year ending 30 June 2030 is not.

Who qualifies

You can elect SBR if all of these are true:

• You are a resident person. This includes mainland companies, free zone companies that are not QFZPs, and UAE resident individuals who are registered for corporate tax because their business turnover is over AED 1 million.
• Your revenue is AED 3 million or less in the tax period you are claiming for.
• Your revenue was AED 3 million or less in every previous tax period since corporate tax started for you.
• You are not a QFZP. QFZPs have their own regime: 0% on qualifying income and 9% on the rest.
• You are not a member of an MNE group. Broadly, these are groups with consolidated revenue above AED 3.15 billion.

Revenue means gross revenue, not profit

The AED 3 million test looks at total revenue in your financial statements, before any expenses. A business with AED 3.2 million of sales and a loss still fails the test.

Once you cross AED 3 million, you are out for good

Because the test covers every previous tax period, one year above AED 3 million ends your access to SBR for that year and every later year. A drop back below the limit later does not bring it back.

Splitting a business to stay under the limit

The Federal Tax Authority (FTA) can deny the relief if a business has been artificially split into smaller entities to keep each one under AED 3 million. If you run several related companies, look at the group as a whole before relying on SBR.

How to elect Small Business Relief

1. Register for corporate tax on EmaraTax and get your Tax Registration Number (TRN). New companies have 3 months from incorporation.
2. Close your books for the year. Prepare financial statements. Businesses with revenue under AED 3 million may prepare accounts on a cash basis. Others use accrual accounting under IFRS or IFRS for SMEs.
3. Confirm your revenue for this period and check it against every earlier period.
4. Complete the corporate tax return on EmaraTax and select the Small Business Relief election. You still declare your revenue and basic financial information.
5. Submit within 9 months of the end of the tax period. If no tax is due, there is nothing to pay, but the return must still be on time.

If you missed the 30 September 2026 deadline for a 2025 calendar year, file now. Under the corporate tax penalty rules, a late return costs AED 500 for each month (or part month) in the first 12 months, then AED 1,000 a month after that.

We prepare the return and submit it through your EmaraTax account on our corporate tax return filing service.

What you still have to do, and what you give up

Electing SBR does not take you out of the system. You still need to:

• Stay registered. Late corporate tax registration carries a fixed AED 10,000 penalty.
• File a return every year, by the 9-month deadline.
• Keep accounting and tax records for at least 7 years. The FTA can ask you to show how you calculated revenue.
• Keep related-party dealings at market value. SBR businesses are not required to prepare transfer pricing documentation, but the arm's length principle still applies.

There are also trade-offs:

• Tax losses from SBR years can't be carried forward. If you make a loss in a year you elect SBR, you lose the right to offset it against future profits.
• Unused net interest expenditure from SBR years also can't be carried forward.

For most small, profitable businesses, SBR is the obvious choice. For a business that is making a loss now and expects larger profits later, not electing may be better, because the loss can then be carried forward. Run the numbers before you file.

Worked examples

Example 1: trading company, always under the limit. A Dubai mainland LLC with a calendar year has revenue of AED 1.9 million in 2024, AED 2.6 million in 2025 and AED 2.9 million in 2026. It can elect SBR for all three years and, on current rules, through 2029 if revenue stays under AED 3 million. It files a return each year and pays no corporate tax.

Example 2: consultancy that crosses the limit once. Revenue is AED 2.7 million in 2024, AED 3.4 million in 2025 and AED 2.5 million in 2026. SBR is available for 2024 only. From 2025 onwards it is taxed normally, even though 2026 revenue is back under the limit. If its 2025 taxable income is AED 600,000, the tax is 9% of (600,000 − 375,000) = AED 20,250.

Example 3: free zone company. A free zone company with AED 1.5 million of revenue that meets the QFZP conditions cannot elect SBR. It uses the free zone corporate tax regime instead. A free zone company that is not a QFZP is treated like any other resident company and can consider SBR.

Example 4: freelancer. A UAE resident consultant earns AED 1.4 million in fees in 2026. Turnover is above AED 1 million, so they must register by 31 March 2027. Revenue is under AED 3 million, so they can elect SBR in the 2026 return, due by 30 September 2027.

Check your position for 2026 to 2029

If your revenue is close to AED 3 million, keep monthly books so you can see where you will land before the year ends. If you are not yet registered, start with corporate tax registration. For tidy monthly records that make the yearly return straightforward, see our bookkeeping service in Dubai.

To see what this would cost for your business, get an instant estimate. For help deciding whether to elect and filing the return, see our Small Business Relief service. You can also check the official guidance on the FTA website and the Ministry of Finance website.