Small Business Relief in the UAE: The AED 3 Million Rule, the 2029 Extension and What Online Sellers Still File

Small Business Relief lets a UAE resident business with revenue of AED 3,000,000 or less elect to be treated as having no taxable income for corporate tax. It now covers tax periods ending on or before 31 December 2029, under Ministerial Decision No. 131 of 2026 (dated 29 July 2026), which the Ministry of Finance announced on 7 August 2026. The earlier end date was 31 December 2026. This page explains who qualifies, what you still have to do, and how an online seller tests revenue, as of October 2026.

What is Small Business Relief and what changed in 2026?

Small Business Relief is a corporate tax election. An eligible taxable person elects, in its tax return, to be treated as having no taxable income for the period, and does not have to calculate taxable income or file a full return.

The 2026 change is about time, not the threshold. Ministerial Decision 131 of 2026 replaced Article 2(2) of Ministerial Decision 73 of 2023 so the threshold keeps applying to subsequent tax periods that end on or before 31 December 2029; the AED 3 million threshold is unchanged.

Which dates matter?

If your tax period ends within these dates, the extension applies to it. If you are unsure when your period ends, ask the FTA or a tax agent to confirm it.

Who qualifies for Small Business Relief?

The tests, from Ministerial Decision 73 of 2023:

1. Revenue of AED 3,000,000 or less in the relevant tax period and in each previous tax period.
2. A tax period starting on or after 1 June 2023.
3. You are a resident person that is not a constituent company of a multinational enterprise group and not a Qualifying Free Zone Person.

Revenue is determined under the accounting standards accepted in the UAE.

The "every previous period" test is the one sellers miss. If revenue goes above AED 3,000,000 in any period, you cannot elect, even if revenue falls back below the threshold later. Growth is therefore a one-way door: the first period above AED 3,000,000 ends your access for good.

How do you elect Small Business Relief?

1. Register for corporate tax. You must be registered first.
2. Prepare revenue records for the period and all earlier periods.
3. Elect in the tax return. The election is made in each tax period, through the return.
4. File the simplified return and keep your records for seven years after the end of the tax period.

Electing is not automatic and registering is not skipped. A business that elects remains a taxable person and must still register, file a simplified return and keep the records behind it. The penalty for missing corporate tax registration is covered in corporate tax registration penalty.

What do you give up by electing?

The relief has trade-offs written into Ministerial Decision 73 of 2023:

• Tax losses incurred in a period where you elected cannot be carried forward.
• Unused losses from earlier periods where you did not elect may be carried forward only into later periods where you also do not elect, subject to the corporate tax law conditions.
• Net interest expenditure in an elected period cannot be carried forward.

A seller that expects losses while it builds a brand may be better off not electing in those years. That is a tax planning decision for a registered tax agent; this page is general information, not tax or legal advice.

How does an online seller test the AED 3 million?

"Revenue" is not the same as marketplace payouts. Payouts are net of fees, returns and advertising, so use sales values from your accounts, prepared under accepted accounting standards. Include every channel under the same legal entity: Amazon.ae, noon, your own site and wholesale. Revenue of related businesses can matter too, because the guide says the relief is not available where a person artificially separates a business.

Worked example, illustrative: a mainland Dubai seller has revenue of AED 2,400,000 in period one and AED 2,900,000 in period two. It qualifies in both and may elect each time. In period three revenue is AED 3,300,000, so it cannot elect, and it cannot elect in period four even if revenue falls to AED 2,000,000.

What mistakes do online sellers make with the relief?

• Using payouts instead of sales. A payout is net of fees and returns, so it understates revenue. Using it can make you think you are below AED 3,000,000 when your accounts say otherwise.
• Forgetting earlier periods. The test looks back at every period since 1 June 2023. A single early period over the limit closes the door.
• Assuming no filing. Electing replaces the full return with a simplified one; it does not remove the return, the registration or the records.
• Splitting the business to stay under. The FTA guide says the relief is not available where a person artificially separates a business.
• Planning past 2029. The relief currently covers periods ending on or before 31 December 2029. We found no published rule for later periods, so do not build a long-term plan that depends on it.

Does it matter if you are in a free zone?

Yes. A Qualifying Free Zone Person cannot elect. Free zone companies that do not meet the qualifying conditions are a different case, and the zone's marketing rarely says which one you are. Read corporate tax for free zone e-commerce and ask the FTA or a tax agent before you rely on the relief.

Small Business Relief does not change VAT. VAT registration depends on the AED 375,000 and AED 187,500 thresholds, tested separately. See late VAT registration penalty.

FAQ

What is the Small Business Relief threshold in the UAE? AED 3,000,000 of revenue in the relevant tax period and in all previous tax periods starting on or after 1 June 2023. Exceeding it in any period ends your ability to elect.

Has Small Business Relief been extended beyond 2026? Yes. Ministerial Decision 131 of 2026, announced on 7 August 2026, extends it to tax periods ending on or before 31 December 2029. The threshold stays at AED 3 million.

Is Small Business Relief automatic? No. You elect it in your corporate tax return for each tax period, after registering for corporate tax.

Can a free zone company use Small Business Relief? Not if it is a Qualifying Free Zone Person, which is excluded under Ministerial Decision 73 of 2023. A free zone company that is not qualifying may be eligible, so check your status with the FTA or a tax agent.

Do I still need to register for corporate tax if I elect the relief? Yes. You must register first, then elect through the return. A business that elects remains a taxable person with registration, filing and record-keeping duties.

Can I use the relief again after going over AED 3 million? No. Once revenue exceeds the threshold in any tax period, you cannot elect, even if revenue later falls below it.

What to do next

Confirm your corporate tax registration, total your revenue by tax period since 1 June 2023, and decide with a tax agent whether to elect. Marketplace sellers can keep revenue evidence tidy by exporting monthly sales reports; Blooprint's Amazon.ae account management and noon account management services work from the same marketplace reports. For the wider picture see UAE corporate tax for sellers.