The UAE Ministry of Finance has extended the availability of Small Business Relief under the Corporate Tax Law, giving eligible small businesses three additional years of simplified compliance. Ministerial Decision No. 131 of 2026, issued on 29 July 2026, amends Ministerial Decision No. 73 of 2023 and comes into effect the day after its publication.
Background: Small Business Relief in Brief
Small Business Relief was introduced under Federal Decree-Law No. 47 of 2022 on the Taxation of Corporations and Businesses to ease the compliance burden on start-ups and small enterprises as the UAE Corporate Tax regime took effect. Rather than requiring every small taxpayer to prepare full financial statements and a Corporate Tax computation from day one, the relief lets qualifying resident persons elect to be treated as having no taxable income for a Tax Period, alongside simplified record-keeping obligations.
Ministerial Decision No. 73 of 2023 set out the detailed mechanics: the revenue threshold a taxable person must remain under, the categories of persons excluded from the relief (such as Qualifying Free Zone Persons and members of Multinational Enterprise Groups), and the window of Tax Periods to which it applies. It is this last element — the applicable window — that Ministerial Decision No. 131 of 2026 now amends.
What Has Changed
Small Business Relief allows resident taxable persons with revenue below a prescribed threshold to be treated as having no taxable income for a given Tax Period, removing the need to calculate and report Corporate Tax on that income, provided the relevant conditions continue to be met.
Under the original Ministerial Decision No. 73 of 2023, this relief applied to Tax Periods commencing on or after 1 June 2023, and was set to lapse for Tax Periods ending after 31 December 2026. Ministerial Decision No. 131 of 2026 replaces Clause (2) of Article (2) of that earlier decision, pushing the sunset date out by three years. The relief now applies to all subsequent Tax Periods that end on or before 31 December 2029.
| Before MD 131 of 2026 | After MD 131 of 2026 |
| Applies to Tax Periods commencing on or after 1 June 2023 | Unchanged — applies to Tax Periods commencing on or after 1 June 2023 |
| Relief window closes for Tax Periods ending after 31 December 2026 | Relief window extended to Tax Periods ending on or before 31 December 2029 |
| Revenue threshold and other eligibility conditions per MD 73 of 2023 | Unchanged — only the applicable period is amended |
Why It Matters
- Longer runway for small businesses: Eligible entities can continue to elect for Small Business Relief — and avoid full Corporate Tax computations — for financial years ending up to 31 December 2029, rather than facing a cut-off after 2026.
- No change to the underlying mechanics: The amendment only extends the applicable period. The revenue threshold, the election requirement, and the other conditions set out in Ministerial Decision No. 73 of 2023 remain unaffected.
- Multi-year planning: Groups and family businesses that structured their growth or restructuring plans around a 2026 cut-off now have additional time to plan the transition into full Corporate Tax compliance.
- Continued simplification: The extension reflects the Ministry’s ongoing support for small and micro businesses navigating the Corporate Tax regime introduced under Federal Decree-Law No. 47 of 2022.
What Businesses Should Do Now
- Reassess eligibility for each upcoming Tax Period through 2029, rather than assuming relief ends after the current year.
- Confirm the annual election for Small Business Relief is made correctly and on time in the Corporate Tax return for each relevant period.
- Revisit medium-term tax and structuring plans that were built around the original 31 December 2026 deadline.
- Continue to monitor revenue against the prescribed threshold, since exceeding it in any period removes eligibility for that period.
Frequently Asked Questions
Does the revenue threshold itself change?
No. Ministerial Decision No. 131 of 2026 only amends the applicable period. The revenue threshold and all other conditions in Ministerial Decision No. 73 of 2023 remain as they were.
Do businesses need to re-apply or file anything as a result of this amendment?
The amendment itself does not require a separate filing. Businesses still need to make the Small Business Relief election in their Corporate Tax return for each Tax Period in which they wish to claim it, as before.
Is the relief automatic once a business is under the threshold? No. Small Business Relief is elective, not automatic, and remains subject to the exclusions and conditions in Ministerial Decision No. 73 of 2023, such as the exclusions for Qualifying Free Zone Persons and members of Multinational Enterprise Groups.