UAE Extends Small Business Tax Facilities Until December 31, 2029
UAE Ministry of Finance extends small business tax facilities to tax periods ending on or before December 31, 2029, reinforcing simplified compliance for firms below AED 3 million.
The Ministry of Finance announced the issuance of Ministerial Decision No. 131, extending the small business tax facilities that ease corporate tax compliance for qualifying enterprises. The extension keeps in place provisions designed to simplify reporting and reduce administrative burdens for taxable persons whose revenues do not exceed AED 3 million, and ensures these measures remain available for tax periods ending on or before December 31, 2029. The move is presented by the ministry as part of broader efforts to support small and emerging companies while maintaining a competitive and modern tax framework.
Ministerial Decision No. 131 announced by the Ministry of Finance
Ministerial Decision No. 131 formally amends elements of the ministerial framework governing corporate tax and business obligations in the UAE. The ministry said the decision modifies select provisions to prolong the availability of small business tax facilities, reinforcing legal certainty for eligible firms. Officials framed the amendment as a continuation of policy measures aimed at nurturing entrepreneurship and easing the compliance burden for smaller taxpayers.
Extension covers tax periods ending on or before 31 December 2029
Under the amendment, the limit introduced by Ministerial Decision No. 73 of 2023 continues to apply for tax periods beginning on or after June 1, 2023, and for subsequent tax periods that end on or before December 31, 2029. This clarifies that firms operating under the simplified regime will be able to rely on the relief through the end of 2029, subject to the conditions set out in the corporate tax rules. The extension provides a multi-year horizon that businesses can use for planning, investment and operational adjustments.
Eligibility threshold set at AED 3 million with simplified compliance rules
The small business tax facilities apply to taxable persons whose annual revenues do not exceed AED 3 million, the threshold established in the ministerial framework. Qualifying entities benefit from streamlined compliance requirements tailored to reduce paperwork and lower the administrative costs associated with corporate tax filings. The ministry stressed that eligibility and the specific simplifications remain governed by the criteria and safeguards detailed in the relevant legislation and regulations.
Legal continuity with Ministerial Decision No. 73 of 2023
Ministerial Decision No. 131 explicitly preserves the application of provisions first set out in Ministerial Decision No. 73 of 2023 for the specified tax periods, thereby maintaining legal continuity. The decision functions as an amendment rather than a full replacement, aligning existing relief mechanisms with the ministry’s stated objectives of competitiveness and robust compliance. Legal practitioners and corporate tax advisers are likely to interpret the move as a signal of policy stability for small and medium-sized operators.
Policy objective: support for startups and sustained economic growth
The ministry framed the extension as part of a larger strategy to support entrepreneurship, help startups scale, and cement the UAE’s status as a competitive global investment destination. By prolonging simplified tax arrangements for smaller businesses, policymakers aim to lower barriers to formalisation, encourage compliance, and channel resources into growth activities. The ministry also linked the decision to efforts to design a tax system that balances revenue collection with incentives that foster long-term, sustainable economic development.
Practical steps for businesses and tax advisers
Businesses that believe they may qualify should review their revenue figures against the AED 3 million threshold and assess how the simplified compliance measures apply to their accounting and reporting practices. Companies are advised to update internal systems, document revenue and transactions carefully, and consult corporate tax advisers or in-house counsel to confirm eligibility and ensure ongoing compliance. Firms with uncertain tax periods or hybrid arrangements should seek professional guidance to determine whether the extension applies to their specific fiscal calendars.
The ministry’s extension of the small business tax facilities under Ministerial Decision No. 131 provides near-term clarity for smaller enterprises and underscores a continued policy focus on easing the administrative impact of corporate taxation. Businesses should monitor further guidance from tax authorities and prepare now to take advantage of the simplified regime through the end of 2029 while ensuring all statutory conditions and record-keeping obligations are met.