UAE Extends Corporate Tax Small Business Relief Through December 2029

The UAE Ministry of Finance has extended the Corporate Tax Small Business Relief for tax periods ending on or before December 31, 2029, amending the previous deadline of December 31, 2026. The extension was enacted through Ministerial Decision No. 131 of 2026, issued on July 29, 2026, which amends Ministerial Decision No. 73 of 2023.

Under the rules, eligible resident businesses and individuals with gross revenue equal to or below AED 3 million in the relevant tax period and all preceding tax periods are treated as having no taxable income. Eligible entities are exempt from transfer pricing documentation requirements for related-party transactions, though tax losses and net interest expenditure incurred during relief periods cannot be carried forward.

Relief is not automatic and must be actively elected within the annual corporate tax return filed within nine months of the tax period's end. Crossing the AED 3 million threshold in any single tax period permanently ends eligibility for that period and all subsequent periods, triggering standard corporate tax rates of 9% on income exceeding AED 375,000.

Qualifying Free Zone Persons and constituent entities of multinational enterprise groups with consolidated revenue exceeding AED 3.15 billion remain explicitly excluded. The Ministry of Finance noted that the relief applies strictly to corporate income tax and does not alter value-added tax obligations or upcoming mandatory e-invoicing timelines taking effect on July 1, 2027.