What changed

Small Business Relief lets a UAE resident business be treated as having no taxable income for a tax period, so no Corporate Tax is due for that period. Until this year, it could only be used for tax periods ending on or before 31 December 2026.

Ministerial Decision No. 131 of 2026 amends the original rules (Ministerial Decision No. 73 of 2023) and moves that cut-off to 31 December 2029. The cut-off is based on when your tax period ends, not the calendar year.

What didn't change

  • The AED 3 million threshold. It is the same figure and is not adjusted for inflation.
  • Your previous tax periods count. Revenue must be AED 3 million or less in the current tax period and in every previous tax period. If you went over AED 3 million in any earlier period, you can't use the relief again, even if revenue falls back below the threshold.
  • Some businesses can't use it. Qualifying Free Zone Persons and members of large multinational groups are excluded.
  • You must elect it. The relief is claimed in your Corporate Tax return for each tax period. You still need to be registered and still need to file the return.
  • Splitting a business doesn't work. Dividing activities between companies to stay under the threshold falls under the anti-abuse rules.

Watch the threshold. Because earlier periods count, one year above AED 3 million ends your access to the relief for every year after it.

Is electing always the right choice?

Not always. If you elect the relief for a period, you give up some things you could otherwise use later, such as carrying forward a tax loss from that period. A business that is making a loss, or expects to, should compare both options before filing.

What to do now

  1. Check your revenue for every tax period since you registered, not just this year.
  2. Confirm you're not a Qualifying Free Zone Person or part of a large multinational group.
  3. Decide each year, before you file, whether electing the relief is better than filing normally.

Sources

This article is general guidance, not advice for your situation. Rules change; check with us or the FTA before relying on it.