Entity Setup
Maximizing UAE Small Business Relief Before December 2029 Deadline
UAE firms with revenues under AED 3 million can simplify compliance under the extended small business relief—know the eligibility, benefits, and steps to ensure qualification.
By NomadicTax Research Team • 5-8 min read • August 20, 2026
## What Is the Small Business Relief (SBR)?
This is a simplified regime under UAE’s corporate tax system providing eased compliance for businesses whose **revenue does not exceed AED 3 million**. It reduces administrative burden while maintaining tax obligations under Federal Decree-Law No. 47 of 2022. ([mof.gov.ae](https://mof.gov.ae/ar/news/ministry-of-finance-announces-extension-of-small-business-relief-for-corporate-tax-purposes-until-31-december-2029/?utm_source=openai))
## Recent Development: Extension Through 31 December 2029
A ministerial amendment (Ministerial Decision No. 131 of 2026) was issued on **7 August 2026** extending the period during which SBR may be claimed until periods ending **on or before 31 December 2029**. ([mof.gov.ae](https://mof.gov.ae/ar/news/ministry-of-finance-announces-extension-of-small-business-relief-for-corporate-tax-purposes-until-31-december-2029/?utm_source=openai))
## Who Qualifies & What It Means
- Businesses with **total annual revenue ≤ AED 3,000,000** can opt into the relief.
- Relief includes simplified compliance: reduced filing, fewer administrative requirements, possibly looser documentation burdens.
- Started applying for tax periods beginning 1 June 2023 and remains valid for periods ending by end of 2029. ([mof.gov.ae](https://mof.gov.ae/ar/news/ministry-of-finance-announces-extension-of-small-business-relief-for-corporate-tax-purposes-until-31-december-2029/?utm_source=openai))
## Case Example
- A Dubai-based IT consultancy with AED 2.8 million turnover in fiscal year ending 30 September 2027 can use SBR. They may benefit by streamlined filing and less frequent audits compared to regular corporate tax regime.
- If growth takes them over AED 3 million, they’d move out of SBR in the next tax period.
## What Businesses Should Do Now
1. **Determine your revenue**: Audit past 12 months' turnover to check whether under AED 3 million.
2. **Project growth trajectory**: If growth is likely to push turnover over threshold before 31 December 2029, consider strategies—perhaps junior entity, shifting scope, or merger timing.
3. **Maintain clear records**: Even under simplified relief, accurate bookkeeping of revenues, expense allocations, and invoices is essential.
4. **Engage tax advisors**: Particularly if your revenues hover near the limit, to ensure correct categorization and avoid surprises.
## Strategic Considerations & Risks
- Exiting SBR by surpassing AED 3 million may trigger greater compliance costs, more detailed financial statements, and potential higher audit exposure.
- Businesses reliant on seasonal sales or large contracts need to assess risk of a single large contract pushing them over the threshold.
- Transparent financials will also prepare businesses for Free Zone considerations, foreign investment or mergers.
**Summing Up**: Small business relief in the UAE offers a favorable window until **31 December 2029** for firms earning under AED 3 million. Firms should assess eligibility now, plan for threshold risks, and maintain compliance to fully benefit from this regime.