The extension
The UAE Ministry of Finance announced Ministerial Decision No. 131 of 2026, extending the period in which eligible taxpayers may claim Small Business Relief. The relief can apply to tax periods ending on or before December 31, 2029, subject to the conditions in the applicable legislation.
The relevant revenue threshold remains AED 3 million for the purposes described by the Ministry. The rule is intended to simplify Corporate Tax compliance for qualifying taxable persons, including many small businesses and start-ups.
Why the relief matters
Small Business Relief can reduce administrative complexity for an eligible business. It may allow the taxpayer to benefit from simplified Corporate Tax compliance treatment rather than preparing its tax position in the same manner as a larger enterprise. However, the relief is not automatic merely because a company describes itself as a start-up or has a small workforce.
Eligibility should be examined for each tax period. Revenue forecasting, connected-person transactions, ownership changes, and changes in business activity can affect the analysis. A business should not make a multi-year assumption that it will qualify through 2029.
Planning considerations for founders
- Track revenue monthly. A year-end estimate is not enough when the threshold is central to eligibility.
- Document related-party activity. Transactions with owners, affiliates, and connected persons should be supported by contracts and accounting records.
- Separate businesses carefully. Splitting activities between entities primarily to remain below a threshold can create legal, tax, and anti-avoidance risks.
- Review tax-period dates. The relief applies by reference to tax periods ending on or before the stated end date, not simply to the calendar year in which revenue arises.
- Retain evidence. Keep ledgers, trial balances, invoices, bank records, revenue reconciliations, and ownership documents supporting the claim.
- Reassess after growth. A business approaching AED 3 million should model the compliance consequences of crossing the threshold before entering major contracts or acquisitions.
Example
Suppose a UAE technology company has AED 2.4 million of annual revenue in one tax period and AED 2.9 million in the next. It may remain within the stated revenue threshold, but it should still review all statutory conditions and preserve a clear revenue reconciliation. If revenue rises to AED 3.2 million, the company should not assume that the extension protects it; the threshold and other eligibility requirements must be tested for that period.
Action plan
Founders should ask their tax advisers to prepare an annual eligibility memo, reconcile revenue to the accounting system, review ownership and connected-party changes, and document the decision to claim—or not claim—Small Business Relief. The extension provides planning certainty, but it does not remove the need for disciplined records and period-by-period testing.