UAE Corporate Tax Small Business Relief: 2029 Extension

UAE Corporate Tax Small Business Relief has been extended by three years, from the previous expiry of 31 December 2026 to tax periods ending on or before 31 December 2029. The extension gives eligible start-ups, freelancers and SMEs additional time to benefit from the relief while the AED 3 million revenue threshold remains unchanged.

The development reflects the UAE’s continued focus on supporting small and growing businesses and reducing the Corporate Tax compliance burden during the early years of the regime. Eligible Taxable Persons will, however, still need to meet the relevant conditions and elect for the relief for each applicable tax period.

What the UAE Corporate Tax Small Business Relief extension means

Under the previous rules, Small Business Relief was available for eligible tax periods ending on or before 31 December 2026. The extension to 31 December 2029 therefore provides eligible UAE businesses with a further three years during which the relief may potentially be claimed.

The AED 3 million revenue threshold has not changed. To qualify, a Taxable Person’s Revenue must be equal to or less than AED 3 million for the relevant tax period and all previous tax periods, subject to the other conditions and exclusions under the Corporate Tax legislation.

Small Business Relief is not automatic. An eligible Taxable Person must elect for the relief in its Corporate Tax return for each relevant tax period.

Point	Previous position	New position
Relief period	Tax periods ending on or before 31 December 2026	Tax periods ending on or before 31 December 2029
Revenue threshold	AED 3 million	AED 3 million – unchanged
Election	Required for each eligible tax period	Required for each eligible tax period
Main benefit	Treatment as having no Taxable Income for the relevant Tax Period, together with simplified compliance	Unchanged
Practical impact	Relief approaching expiry	Three additional years of potential relief

For a wider practical guide, you may read WellTax’s article on Small Business Relief UAE explained: benefits, drawbacks and tips.

What UAE businesses should check now

UAE Corporate Tax Small Business Relief should not be treated as automatic. Businesses should check their eligibility before each filing period, especially where revenue is growing, the business structure has changed, or there are transactions with related entities.

Before claiming, review:

• Revenue history: confirm whether revenue stayed within the AED 3 million limit in the current and previous tax periods.
• Tax profile: check whether exclusions could apply, including free zone or multinational group considerations.
• Filing process: make sure the relief is elected in the relevant Corporate Tax return.
• Future tax position: consider whether electing for the relief is beneficial based on the wider tax position of the business, particularly where there are tax losses, significant deductible expenditure or expectations of higher profitability in future periods.

If a business is close to the AED 3 million threshold, has related entities, or operates through a free zone, the 2029 extension should prompt a fresh review. Artificial separation of business may be challenged where arrangements are used to obtain a Corporate Tax advantage.

Businesses should also stay aware of filing and registration timing. Our guide to Corporate Tax Registration Deadline UAE can help with deadline and penalty context.

WellTax can support UAE businesses in assessing whether UAE Corporate Tax Small Business Relief applies and how the election should be reflected in the filing process.

Written by Keziah Nicole Dela Cruz, CPA, Senior Accountant & FTA Tax Agent, WellTax.