Small Business Relief (SBR) was due to end with tax periods ending on 31 December 2026. In August 2026 the Ministry of Finance issued Ministerial Decision No. 131 of 2026, which extends the relief to tax periods ending on or before 31 December 2029.
For a business with a calendar financial year, that means SBR can now be elected for 2026, 2027, 2028 and 2029. Here is what changed, what did not, and what small businesses should do now.
What changed and what did not
Changed: the end date. SBR now covers tax periods ending on or before 31 December 2029, three more years than before.
Not changed: the conditions. A resident person can still elect SBR for a tax period only if:
- Revenue is AED 3 million or less in that tax period and in every previous tax period
- The business is not a Qualifying Free Zone Person
- The business is not a member of a multinational group with consolidated revenue above EUR 750 million
If SBR is elected, the business is treated as having no taxable income for that period. It still has to register for Corporate Tax and file a return every year, using the simplified return.
The trade-offs still apply
- Losses are not carried forward. Tax losses from an SBR period cannot be used in later years. Over four possible SBR years, that can add up for a business that is investing heavily now and expects profits later.
- Disallowed interest is not carried forward either.
- One year over AED 3 million ends it for good. Once revenue goes above the threshold in any tax period, SBR is not available in later periods, even if revenue falls again.
- Artificial separation is penalised. Splitting a business into several entities to stay under AED 3 million lets the FTA deny the relief and apply penalties.
What small businesses should do now
- Decide each year whether to elect. SBR is an election, not automatic. If you expect a loss, compare the benefit of SBR with the value of carrying that loss forward.
- Track revenue against the AED 3 million line. A growing business should forecast when it will cross the threshold, because that ends the relief permanently.
- Keep filing on time. SBR does not remove the return. For a calendar year, the return is due nine months after the year ends, for example 30 September 2027 for the 2026 tax period.
- Keep proper books anyway. You still need reliable revenue figures to prove eligibility, and clean accounts make the move to a full return easy when the relief ends or you outgrow it.
- Plan for 2030. Unless the relief is extended again, tax periods starting in 2030 will be taxed normally: 0% on taxable income up to AED 375,000 and 9% above that.
How Dreambooks helps
Dreambooks tracks your revenue against the AED 3 million threshold, prepares your Corporate Tax return from the same ledger as your VAT returns, and keeps the full accounts you need whether you elect SBR or file a full return.
Official sources
- Ministry of Finance: Small Business Relief extended to 31 December 2029
- Ministerial Decision No. 131 of 2026 on Small Business Relief
- FTA: Small Business Relief (Corporate Tax)
This article is general information as of September 2026, not tax advice. Check Ministerial Decision No. 131 of 2026 and the latest FTA guidance, or speak to your tax adviser, before acting.