Ministerial Decision No. 131, announced on 7 August 2026, confirms it. The regime that allows small businesses to pay 0% Corporate Tax with simplified obligations will remain available for tax periods ending on or before 31 December 2029. Previously, the deadline was set at 31 December 2026.
For Spanish SMEs and moderate-revenue structures in the UAE, this removes a growing concern. There was a real possibility that the upcoming financial year would be the last one eligible for this benefit.
What Is Small Business Relief
Small Business Relief (SBR) allows a UAE-resident company to be treated as if it had not generated taxable income. This applies to a specific tax period. In practice, this means zero Corporate Tax for that period. It also includes a simplified return that reduces the reporting burden to the Federal Tax Authority (FTA). The regime is set out in Article 21 of the Corporate Tax Law and in Ministerial Decision No. 73 of 2023.
The core requirement remains unchanged following the extension. The company must have generated revenue of AED 3,000,000 or less in the current tax period. It must also meet this threshold in every prior period since Corporate Tax took effect on 1 June 2023. Qualifying Free Zone Persons (QFZP) remain excluded from the regime. So do entities belonging to multinational groups with consolidated revenue above AED 3.15 billion.
What Exactly Changes Under Ministerial Decision No. 131
The extension affects only the regime’s time horizon. The AED 3,000,000 revenue threshold has not changed. Nor have the existing eligibility conditions or exclusions. The only thing that changes is the window of application. Previously, it ended on 31 December 2026. Now, it extends through 31 December 2029.
This means a company that has already been applying SBR since 2023 can continue to do so, period by period, through the close of 2029 — provided it continues to meet the revenue requirement.
What Doesn’t Change: The Election Remains Active, Not Automatic
The extension does not alter a point the FTA has repeatedly emphasised: SBR does not apply by default. The company must actively elect it in each Corporate Tax return. It must do so through EmaraTax, within the statutory filing deadline of nine months from the end of the tax period. Claiming the relief also still requires registration with the FTA and retention of records supporting the declared revenue.
The trade-off of electing SBR also remains unchanged. By choosing it, the company does not declare tax losses for that period. As a result, it cannot carry them forward to future periods. For businesses with occasional losses or fluctuating income, it remains advisable to compare two things. On one hand, the immediate tax saving. On the other, the value of preserving those losses to offset future profits.
In Summary
Ministerial Decision No. 131 gives small Spanish structures in the UAE three additional years. As a result, they can continue operating with zero Corporate Tax and simplified obligations. The extension removes short-term uncertainty. However, the fundamentals remain the same: Small Business Relief is still a choice that must be assessed and formalised every financial year. For this reason, it is worth reviewing with concrete figures before filing.
At RLD, we can review your company’s tax position in the UAE and help you decide whether Small Business Relief is the right choice for your next Corporate Tax return.
