On 7 August 2026, the UAE Ministry of Finance announced the issuance of Ministerial Decision No. 131 of 2026, extending Small Business Relief under the UAE Corporate Tax regime to Tax Periods ending on or before 31 December 2029.
Small Business Relief is provided for under Article 21 of Federal Decree-Law No. 47 of 2022 on the Taxation of Corporations and Businesses, as amended (the “Corporate Tax Law”), and implemented through Ministerial Decision No. 73 of 2023. Ministerial Decision No. 131 of 2026 replaces Article 2(2) of Ministerial Decision No. 73 of 2023, replacing the previous 31 December 2026 cut-off.
Article 1 provides: “2. The threshold set out in Clause (1) of this Article shall apply to Tax Periods commencing on or after 1 June 2023 and such threshold shall continue to apply to subsequent Tax Periods that end on or before 31 December 2029.”
Key Points
The 3 Million Dirhams revenue threshold remains unchanged. Under Article 2 of Ministerial Decision No. 73 of 2023, a Resident Person may elect for Small Business Relief where its Revenue does not exceed AED 3 Million in the relevant and all previous tax periods – if the threshold is exceeded in any relevant or previous tax period, the relief is unavailable. Where the relief applies, Article 21(1) of the Corporate Tax Law treats the Taxable Person as having no Taxable Income for the relevant Tax Period. Corporate Tax registration, simplified Tax Return filing and record-keeping obligations nevertheless continue.
Under Article 3 of Ministerial Decision No. 73 of 2023, Small Business Relief is not available to Qualifying Free Zone Persons or Constituent Companies of Multinational Enterprises Groups. Article 6 also addresses artificial separation of a Business or Business Activity to obtain the relief which may be treated as an arrangement to obtain a Corporate Tax advantage under Article 50(1) of the Corporate Tax Law.
Implications for Businesses
The extension therefore applies to qualifying Tax Periods ending on or before 31 December 2029, subject to Article 21 of the Corporate Tax Law and Ministerial Decision No. 73 of 2023, as amended by Ministerial Decision No. 131 of 2026.
Businesses should continue to monitor their Revenue against the AED 3 million threshold and periodically reassess their eligibility, particularly where there are changes to their ownership, group structure or business activities.
For advice on Corporate Tax compliance and the applicability of Small Business Relief to your business, please contact Suneer Kumar at suneer@alsuwaidi.ae or Vida Grace Serrano at vida@alsuwaidi.ae.