Small Business Relief was written to expire. On 29 July 2026 the Ministry of Finance issued Ministerial Decision No. 131 of 2026, which amends the relief’s enabling decision and moves its end date out by three years — to tax periods ending on or before 31 December 2029.
What actually changed
Exactly one clause. Article 2(2) of Ministerial Decision No. 73 of 2023 previously applied the revenue threshold to tax periods ending on or before 31 December 2026. It now reads: the threshold applies to tax periods commencing on or after 1 June 2023 and continues to apply to subsequent tax periods that end on or before 31 December 2029. The decision takes effect the day after publication.
What did not change
Everything else. The threshold is still AED 3 million of revenue, and it still has to hold in the relevant tax period and in every previous tax period — one year above AED 3 million closes the door permanently, extension or not. The relief is still unavailable to Qualifying Free Zone Persons and to constituent companies of multinational groups with consolidated revenue of AED 3.15 billion or more (Cabinet Decision No. 44 of 2020 — the country-by-country reporting test, not the Pillar Two/DMTT one, which is a separate regime with its own threshold). And it is still an election, one you have to make in every tax period: you register, you file a return — a simplified one — and you claim the relief on it. Nothing about this is automatic, and a period filed without the election cannot be put right later.
What it is worth
For an eligible business the relief treats you as having no taxable income for the period. Against the 9% rate above the AED 375,000 band, the arithmetic is easy: an SME with AED 800,000 of taxable income would otherwise owe roughly AED 38,000 a year. Three more years of relief is real money, and it lands with the certainty of a published decision rather than a hoped-for renewal.
What to do now
- Re-test eligibility on the prior-period rule, not just this year. Revenue is measured across every tax period since June 2023. Businesses that grew through AED 3 million in 2024 or 2025 gain nothing from the extension.
- Do not skip registration or filing. The relief removes the tax, not the obligations. Late registration still carries the AED 10,000 penalty, and the return is still due within nine months of year-end.
- Revisit any plan built around a 2026 cliff. Restructuring, timing of income, or a decision to leave the relief early may have been priced on the old sunset. That assumption is now three years out of date.
- Free zone? It is a choice, not a combination. A Qualifying Free Zone Person cannot elect Small Business Relief. What changed is the calculation behind holding QFZP status at all: a free-zone business that does not meet those conditions is an ordinary taxable person, and can elect the relief if it is under AED 3 million. Three more years alters that arithmetic.
- Keep the books that prove it. The election is only as good as the revenue records behind it — and the FTA can ask.
The wider read
Two amendments in under three months — on 10 May 2026 the Ministry moved the e-invoicing ASP deadline from 31 July to 30 October (Ministerial Decision 66 of 2026), and now this — point the same way: the UAE is willing to move dates when the compliance burden lands faster than the market can absorb it. That is worth remembering when planning against any transitional measure. Plan for the current law, not for the extension you hope arrives.
If you want the eligibility test run properly against your own numbers, our Corporate Tax service does exactly that — and the estimator on that page now reflects the 2029 window.