Small Business Relief in the UAE Extended to 2029
- 08.08.2026
- Posted by: Uwe Hohmann
- Categories: Tax, Dubai
In our article of 01.08.2026, we set out the eligibility conditions for SBR (Small Business Relief) and noted that the AED 3,000,000 threshold applied only to Tax Periods ending on or before 31.12.2026, with no confirmation of what would follow.
That position has now been resolved. The Ministry of Finance has issued MD (Ministerial Decision) 131, which amends the Ministerial Decision on the Taxation of Corporations and Businesses and extends the relief to Tax Periods ending on or before 31.12.2029.
What the Decision Changes
The threshold prescribed under MD 73 of 2023 continues to apply to Tax Periods commencing on or after 01.06.2023, and now extends to subsequent Tax Periods ending on or before 31.12.2029.
No other provision has been altered. The conditions, the exclusions and the election mechanism remain as they were, and the eligibility analysis set out in our earlier article therefore continues to apply without amendment.
The Threshold Remains at AED 3,000,000
When the original end date was set, there was a reasonable expectation that the Ministry would take the opportunity to revise the threshold, either upwards to reflect inflation and business growth, or downwards as the CIT (Corporate Income Tax) regime matured. It has done neither. AED 3,000,000 remains the threshold in nominal terms until at least the end of 2029.
The Effect on the Election Decision
Tax losses and Net Interest Expenditure arising in a period for which SBR is claimed cannot be carried forward. Where the relief was due to end in 2026, the consequences of that were limited. Over a window extending to 2029, they accumulate.
A company anticipating losses in its early years and profits thereafter should consider carefully which periods to elect for. An election in a loss-making period produces no saving, since no tax would have been payable in any event, while the loss surrendered might otherwise have been set against profits arising in 2030.
The threshold itself has also become more consequential. Exceeding AED 3,000,000 in any single period ends the relief permanently. Under the previous end date, a company exceeding the threshold in 2026 forfeited very little. A company exceeding it in 2027 now forfeits three further years of relief that would otherwise have been available.
The End Date Depends on Your Tax Period
The decision refers to Tax Periods ending on or before 31.12.2029, which is not the same as the relief being available throughout 2029 for every company.
A company with a calendar year end may claim the relief for the period closing 31.12.2029. A company with a 30 June year end may claim it for the period closing 30.06.2029, but the following period closes 30.06.2030 and falls outside the window. A non-December year-end therefore results in one fewer qualifying period.
What This Means for Your Business
The extension provides a settled basis for planning, which is what makes the relief useful across a multi-year horizon rather than a matter of annual uncertainty. The review itself is unchanged in substance. Confirm that revenue has not exceeded AED 3,000,000 in any earlier period, confirm that QFZP (Qualifying Free Zone Person) or MNE (Multinational Enterprise) Group status does not apply, and assess the losses and interest forgone against the tax saved across the longer period now available.
Where a company is trading close to the threshold, the year in which it expects to exceed it should be modelled now. The relief is lost permanently at that point, and considerably more of it is now at stake.
TME Services - Your Complete Business Partner
TME Services advises business owners across the UAE on CIT registration, SBR elections and the compliance obligations that sit behind them.
Our comprehensive services are designed to support you every step of your business journey:
- Company Formation: We guide you through all aspects of setting up your company, whether in a free zone or on the mainland, ensuring you choose the best option for your business.
- Visa and Emirates ID Services: We streamline the process of securing visas and Emirates IDs for you and your employees, allowing you to focus on your business operations.
- Accounting: Our team ensures your business stays compliant with local financial regulations, which is crucial for maintaining good standing in Dubai’s business community.
- Tax: We help manage Dubai’s tax environment, ensuring your business remains compliant while optimizing your tax position.
- Compliance and AML: We help ensure your business remains compliant with UAE laws and regulatory requirements while assisting in the implementation, maintenance, and training of AML (Anti-Money Laundering) procedures in line with national and international standards.
- Business Consulting: Leveraging our deep understanding of Dubai’s market, we provide valuable insights and help you develop effective strategies to succeed.
Visit our services page to learn more about everything we do.
