UAE Corporate Tax for Small Businesses: Small Business Relief Extended to 2029
Short answer
UAE corporate tax is charged at 9 percent on taxable income above AED 375,000, with 0 percent below that. Small Business Relief lets eligible resident businesses with revenue of AED 3 million or less elect to be treated as having no taxable income for a tax period. Under Ministerial Decision No. 131 of 2026, the relief has been extended to tax periods ending on or before 31 December 2029 (previously 31 December 2026). Businesses still generally need to register and file returns, and some entities are excluded.
Key takeaways
- ✓Corporate tax: 0 percent up to AED 375,000 of taxable income, 9 percent above.
- ✓Small Business Relief: revenue of AED 3 million or less, now to tax periods ending by 31 Dec 2029.
- ✓Relief is elected in your return; registration and filing still apply.
- ✓Keep proper accounts: revenue is tested each period.
Key numbers
| Item | Detail |
|---|---|
| Standard rate | 9 percent on taxable income above AED 375,000 |
| Lower band | 0 percent on taxable income up to AED 375,000 |
| Small Business Relief threshold | Revenue of AED 3 million or less in the period and previous periods |
| Relief available until | Tax periods ending on or before 31 December 2029 (Ministerial Decision No. 131 of 2026) |
Exclusions apply, for example to certain group members and qualifying free zone persons. Confirm your position with a registered tax adviser and the Federal Tax Authority.
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Book a Growth AuditWhat small businesses should do
- Register for corporate tax with the Federal Tax Authority if you have not already.
- Keep clean books: revenue tracking matters for the AED 3 million test.
- Decide each period whether to elect Small Business Relief.
- File returns on time.
- Prepare for e-invoicing too. See UAE e-invoicing for small businesses.
Use automation to stay organised
Automated bookkeeping, invoice processing and reporting make tax time easier and reduce errors. See how to calculate automation ROI and AI automation.
Husbar is a marketing and automation agency, not a tax adviser. Please consult a registered tax agent for advice on your situation. For growth support, book a Growth Audit.
Common mistakes to avoid
- Not registering because profits are low. Registration obligations can apply regardless of profit; relief is something you elect, not an automatic exemption from registering.
- Mixing personal and business spending. Clean records make filing and any relief election much simpler.
- Missing deadlines. Late registration or filing can lead to penalties; check the Federal Tax Authority's current deadlines.
- Assuming all businesses qualify. Relief has conditions, including revenue thresholds and exclusions for some types of entities.
A simple monthly routine
- Upload receipts and invoices to your accounting tool every week.
- Reconcile bank statements monthly.
- Review profit and loss each month with your accountant or bookkeeper.
- Keep a calendar of tax deadlines and set reminders.
This routine also helps you make better marketing decisions, because you will know your real margins. Our marketing budget guide for small businesses explains how to set a budget from those numbers.
What is the UAE corporate tax rate?+
9 percent on taxable income above AED 375,000, and 0 percent on taxable income up to that amount.
Who qualifies for Small Business Relief?+
Eligible resident persons with revenue of AED 3 million or less in the relevant tax period and previous periods, subject to exclusions.
Until when is Small Business Relief available?+
For tax periods ending on or before 31 December 2029, following Ministerial Decision No. 131 of 2026.
Do I still need to register if I claim relief?+
Generally yes. Relief is elected in the tax return; registration and filing obligations still apply.
Can Husbar help with tax?+
No, please use a registered tax agent. We help with marketing and automation.
Do free zone companies pay corporate tax?+
Free zone companies are within the corporate tax system. Some may qualify for special treatment if they meet conditions. Seek professional advice.
Where can I check the official rules?+
The UAE Ministry of Finance and the Federal Tax Authority publish the law, decisions and guides on their websites.
Sources
- Entrepreneur Middle East: UAE extends small business tax relief through 2029 (August 2026).
- Ministerial Decision No. 73 of 2023 on Small Business Relief.
- UAE Federal Tax Authority (tax.gov.ae).
Team Husbar
Husbar Editorial
Team Husbar is the strategy, psychology and research team at Husbar, a psychology-led growth agency headquartered in Dubai. Together we have worked with 100+ brands over 10+ years.
Want this applied to your brand?
We will find the psychology behind your lost sales and show you what to fix first.
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