UAE Small Business Relief Extended Until 2029

There is an important Corporate Tax update for small businesses operating in the UAE.

The UAE Ministry of Finance has extended the period during which Small Business Relief may be claimed to Tax Periods ending on or before 31 December 2029, giving eligible businesses additional time to benefit from this Corporate Tax relief.

The extension is particularly relevant for start-ups, entrepreneurs and smaller businesses navigating their UAE Corporate Tax obligations.

But what exactly is Small Business Relief, who qualifies, and what does the extension mean for your company?

What Is Small Business Relief in the UAE?

Small Business Relief was introduced under the UAE Corporate Tax framework to reduce the Corporate Tax and compliance burden on eligible small and micro businesses.

Where the relevant requirements are met and the relief is elected, the eligible Resident Person is treated as having no Taxable Income for the relevant Tax Period.

According to the Federal Tax Authority, Small Business Relief can be elected by eligible Resident Persons, including natural persons and juridical persons.

The key Revenue threshold is:

AED 3 million or less.

The FTA states that Revenue must be equal to or less than AED 3 million in the current and all previous relevant Tax Periods.

What Has Changed?

Previously, the AED 3 million Small Business Relief threshold applied to qualifying Tax Periods ending on or before 31 December 2026.

The latest amendment extends the period during which Small Business Relief may be claimed to qualifying Tax Periods ending:

On or before 31 December 2029

This provides eligible businesses with an additional three years in which the relief may potentially be available, subject to meeting all applicable requirements.

Who Can Claim UAE Small Business Relief?

Small Business Relief may be available to an eligible Resident Person where:

• Revenue is AED 3 million or less for the relevant Tax Period;
• Revenue did not exceed AED 3 million in previous relevant Tax Periods;
• The person meets the applicable eligibility requirements; and
• An election for Small Business Relief is made for the relevant Tax Period.

The AED 3 million threshold relates to Revenue — not profit.

For this reason, businesses need accurate accounting records to properly assess their position.

Who Cannot Claim Small Business Relief?

The relief is not available to certain categories, including:

• Qualifying Free Zone Persons; and
• Constituent companies of certain Multinational Enterprise Groups.

The Ministry of Finance also provides anti-abuse provisions relating to the artificial separation of businesses.

Businesses should therefore avoid structuring activities purely to remain below the Revenue threshold. Eligibility needs to reflect the genuine commercial and operational position of the business.

Does Revenue Below AED 3 Million Mean You Automatically Qualify?

No.

Being below the AED 3 million Revenue threshold does not automatically mean a business can ignore its Corporate Tax obligations.

Small Business Relief is an election, and eligibility should be reviewed against the applicable Corporate Tax legislation and conditions.

Corporate Tax registration, record-keeping and filing obligations may still apply.

Why Does the 2029 Extension Matter?

For qualifying small businesses, extending Small Business Relief until the end of 2029 can provide greater certainty and additional breathing room while they establish and grow their operations.

However, businesses should monitor their Revenue carefully.

Once Revenue exceeds the applicable AED 3 million threshold in a relevant Tax Period, Small Business Relief will no longer be available under the applicable conditions.

This makes proper bookkeeping and ongoing Corporate Tax compliance increasingly important as a business grows.

FAQs: UAE Small Business Relief 2029

Is UAE Small Business Relief extended until 2029?

Yes. The relief period has been extended so that eligible businesses may claim Small Business Relief for qualifying Tax Periods ending on or before 31 December 2029.

What is the Revenue limit for Small Business Relief?

The Revenue threshold is AED 3 million for the relevant Tax Period and previous relevant Tax Periods.

Is the AED 3 million threshold based on profit?

No. The threshold is based on Revenue, not profit or Taxable Income.

Can Free Zone companies claim Small Business Relief?

A Qualifying Free Zone Person cannot elect for Small Business Relief.

Is Small Business Relief automatic?

No. Eligible taxpayers must elect for Small Business Relief for the relevant Tax Period.

Do businesses claiming Small Business Relief still need to file Corporate Tax returns?

Small Business Relief does not automatically remove a business from the UAE Corporate Tax compliance framework. Businesses should review their registration, filing and record-keeping obligations based on their circumstances.

Is Your Business Eligible for Small Business Relief Until 2029?

The extension is positive news for UAE small businesses, but AED 3 million in Revenue does not automatically mean your business qualifies.

Your current and previous Revenue, Corporate Tax status, business structure and other eligibility requirements should all be considered.

Bizzmosis can help you assess your Corporate Tax position, determine whether Small Business Relief may apply, and manage your accounting, bookkeeping and Corporate Tax compliance requirements.

Not sure if your business qualifies?

Contact Bizzmosis for a Corporate Tax assessment and make sure your business benefits from the reliefs available while remaining fully compliant with UAE requirements.