The UAE Ministry of Finance announced an important Corporate Tax development for SMEs and entrepreneurs in August 2026. Under Ministerial Decision No. 131 of 2026, the period during which eligible businesses may benefit from Small Business Relief has been extended to tax periods ending on or before 31 December 2029.
The existing revenue threshold remains AED 3 million. Small Business Relief can allow an eligible Taxable Person meeting the applicable requirements to be treated as having no taxable income for the relevant Corporate Tax period, while also benefiting from simplified compliance requirements.
However, the extension does not mean that every company with revenue below AED 3 million automatically qualifies. Eligibility conditions continue to apply, and the relief remains unavailable to certain categories, including Qualifying Free Zone Persons and members of certain multinational enterprise groups.
Businesses should also remember that Corporate Tax registration and filing obligations may still apply even where Small Business Relief is elected.
What SMEs should consider
Small businesses should review revenue for the current and previous relevant tax periods, Corporate Tax status, whether an election for Small Business Relief is commercially appropriate, existing tax losses and other tax attributes, free-zone status and group structure, and filing and record-keeping obligations.
Dr. Hamad Alustath Advocates and Legal Consultants provides legal support to businesses navigating UAE regulatory and commercial requirements.
This article is general information and is not tax or legal advice.