UAE extends corporate tax relief for small businesses until 2029
The UAE has extended its Small Business Relief programme until December 31, 2029, giving eligible companies, startups and entrepreneurs more time to benefit from simplified corporate tax requirements.
The decision applies to businesses with annual revenue of up to Dh3 million, provided they meet the conditions set under the country’s corporate tax legislation. The extension was introduced through Ministerial Decision No. 131 and covers tax periods ending on or before the end of 2029.
What the relief means for small businesses
Small Business Relief is designed to reduce the administrative burden of the UAE’s corporate tax system for smaller companies.
Eligible businesses can continue to use simplified compliance procedures rather than dealing with the full requirements that apply to larger companies. The measure is intended to make it easier for entrepreneurs to manage tax obligations while focusing on business development and growth.
The Ministry of Finance said the extension is aimed at strengthening the UAE’s business environment, supporting startups and small companies, and maintaining the country’s position as an attractive destination for global investment.
SMEs remain central to the UAE economy
Small and medium-sized enterprises play a major role in the country’s private sector.
SMEs represent more than 94 per cent of businesses in the UAE and contribute over 60 per cent of the country’s non-oil GDP, according to government data.
Extending tax relief therefore affects a significant part of the UAE’s business community, particularly founders and growing companies that are still building revenue and expanding their operations.
For Dubai, where thousands of startups, freelancers and international entrepreneurs establish businesses every year, the extension provides additional certainty around tax planning and operating costs.
How UAE corporate tax works
The UAE introduced federal corporate tax for financial years beginning on or after June 1, 2023.
The standard corporate tax rate is 9 per cent on taxable income above Dh375,000, while taxable income up to that threshold is subject to a zero per cent rate.
For individuals conducting business activities, corporate tax generally applies when annual turnover exceeds Dh1 million, ensuring that personal income unrelated to business activity remains outside the corporate tax framework.
Small Business Relief works separately from these thresholds by allowing qualifying companies with revenue of up to Dh3 million to benefit from simplified treatment.
Supporting entrepreneurship through 2029
The extension forms part of the UAE’s wider strategy to create a competitive and internationally aligned tax system while continuing to support entrepreneurship.
By keeping the relief in place for another three years, the government is giving smaller companies more time to grow before moving into more complex corporate tax compliance structures.
For entrepreneurs and SMEs across Dubai and the wider UAE, the decision offers greater predictability — and reinforces the country’s broader push to remain one of the region’s most business-friendly economies.
