The UAE has announced an important update for small businesses and start-ups. The Ministry of Finance has extended the Small Business Relief (SBR) scheme for Corporate Tax purposes until 31 December 2029.

The extension was announced on 7 August 2026 through Ministerial Decision No. (131) of 2026, which amends provisions of Ministerial Decision No. (73) of 2023. The move is intended to continue supporting small businesses and start-ups while reducing their Corporate Tax compliance burden.

For Dubai-based entrepreneurs, SMEs and professional service businesses, this extension provides additional time to benefit from the relief, provided they meet the applicable conditions.

What Is Small Business Relief?

Small Business Relief is a provision under the UAE Corporate Tax framework designed to support eligible small and micro businesses.

Under the current rules, a Resident Taxable Person may elect to claim Small Business Relief where its revenue does not exceed AED 3 million in the relevant tax period and the applicable previous tax periods.

The AED 3 million threshold will now continue to apply to qualifying tax periods ending on or before 31 December 2029.

The scheme is intended to make Corporate Tax compliance simpler for smaller businesses and reduce the financial and administrative burden associated with the Corporate Tax regime.

What Has Changed in 2026?

When Small Business Relief was originally introduced, the AED 3 million revenue threshold was scheduled to apply only to tax periods ending on or before 31 December 2026.

The latest Ministerial Decision extends this period to tax periods ending on or before 31 December 2029.

Who Can Benefit From Small Business Relief?

The relief is primarily aimed at resident taxable persons whose revenue remains within the prescribed threshold.

A key requirement is that revenue must not exceed AED 3 million for the relevant tax period and the applicable previous tax periods. Once the relevant revenue threshold is exceeded, the business cannot continue to elect for Small Business Relief under the applicable rules.

Revenue is determined according to the accounting standards accepted in the UAE. This makes proper bookkeeping and financial record-keeping particularly important for businesses that want to determine whether they qualify.

Who Cannot Claim Small Business Relief?

Not every business with revenue below AED 3 million automatically qualifies.

The existing rules specifically exclude certain categories, including:

• Qualifying Free Zone Persons
• Constituent companies of Multinational Enterprises Groups (MNE Groups) as defined under the relevant UAE legislation

These exclusions are important because a business should not assume that simply being below the AED 3 million revenue threshold automatically makes it eligible.

Businesses should review their legal structure, tax status and activities before electing for the relief.

What Does the Relief Mean for Small Businesses?

One of the major benefits of Small Business Relief is the reduction in the Corporate Tax burden and simplification of certain compliance requirements for eligible businesses.

The UAE Ministry of Finance has described the measure as supporting start-ups and small or micro businesses by reducing Corporate Tax and compliance costs.

For a small business owner, this can mean less administrative pressure and more opportunity to focus on:

• Growing the business
• Hiring employees
• Improving operations
• Investing in technology
• Expanding products and services
• Building a stronger financial foundation

However, businesses should still understand their Corporate Tax obligations and maintain appropriate records.

Small Business Relief Is Not the Same as the 0% Corporate Tax Rate

This is an important distinction.

The UAE Corporate Tax system separately provides a 0% Corporate Tax rate on taxable income up to AED 375,000, subject to the applicable rules. Taxable income exceeding AED 375,000 is generally subject to the applicable 9% Corporate Tax rate.

Small Business Relief is a separate provision based on revenue and eligibility conditions.

Therefore, businesses should avoid assuming that the AED 3 million Small Business Relief threshold means that all businesses with revenue below AED 3 million automatically fall under the general 0% Corporate Tax rate.