What Ministerial Decision No. 131 of 2026 Changed
Under Federal Decree-Law No. 47 of 2022 and Ministerial Decision No. 73 of 2023, UAE Small Business Relief originally applied only to tax periods ending on or before 31 December 2026. With Ministerial Decision No. 131 of 2026, the UAE Ministry of Finance extended that relief window by three full years through 31 December 2029.
For solo founders, consultants, e-commerce brands, SaaS startups, and agencies incorporating in Dubai or Sharjah, this means up to AED 3,000,000 in annual gross revenue can legally operate at an effective 0% UAE Corporate Tax rate—paired with 0% UAE personal income and dividend tax.
How the Three 0% & 9% UAE Corporate Tax Regimes Fit Together
| Tax Regime | Effective Rate | Eligibility Threshold | Filing & Compliance Requirement |
|---|---|---|---|
| Small Business Relief (Elective) | 0% Corporate Tax | Gross revenue <= AED 3,000,000/yr (through 31 Dec 2029) | FTA registration + simplified annual election in EmaraTax |
| Standard SME Profit Threshold | 0% up to AED 375k; 9% above | All UAE resident Free Zone & Mainland entities | FTA registration + annual IFRS financial statements & CT return |
| Qualifying Free Zone Person (QFZP) | 0% on Qualifying Income | Free Zone entities meeting substance, de minimis & audit rules | Mandatory audited financial statements + FTA CT return |
Who Cannot Elect Small Business Relief?
- Qualifying Free Zone Persons (QFZPs):: Entities already claiming the 0% QFZP regime cannot simultaneously elect Small Business Relief in the same tax period (though a Free Zone company may forego QFZP status to use simpler Small Business Relief while under AED 3M revenue, subject to advisor review).
- Multinational Enterprise Groups (MNEs):: Constituent entities of MNE groups with consolidated global revenue exceeding AED 3.15 billion (Pillar Two scope) are excluded.
- Artificial Business Splitting:: Under the FTA General Anti-Abuse Rule (GAAR), splitting a single commercial operation across multiple UAE licenses solely to stay beneath the AED 3,000,000 threshold will result in revenue aggregation and penalties.
Frequently Asked Questions
Is Small Business Relief applied automatically?
No. Small Business Relief is an explicit election you (or your tax advisor) must make inside your annual EmaraTax Corporate Tax return for each eligible tax period.
Does Small Business Relief exempt my UAE company from 5% VAT?
No. UAE Corporate Tax and UAE Value Added Tax (VAT) are separate federal taxes. Mandatory 5% VAT registration still triggers once taxable supplies and imports exceed AED 375,000 over 12 months (with voluntary registration at AED 187,500), though many international export services qualify for 0% zero-rated VAT.