UAE extends small business tax relief and offers penalty waivers

The UAE Ministry of Finance has extended the Small Business Relief (SBR) program through December 31, 2029. Under Ministerial Decision No 131 of 2026, eligible resident businesses with annual revenue of AED 3 million or less can elect for this relief, which treats the business as having no taxable income for the relevant period. To maintain eligibility, businesses must continue to comply with corporate registration, return filing, and record-keeping requirements.

Separately, the Federal Tax Authority (FTA) is offering a waiver for the standard AED 10,000 late-registration penalty. To qualify for this waiver under FTA Decision No 3 of 2024, businesses must file their first Corporate Tax return within seven months following the end of their first tax period. For instance, businesses with a tax period ending December 31, 2025, must meet this requirement by July 31, 2026. This deadline is distinct from the standard statutory filing deadline, which is typically nine months after the end of the tax period.