The relief everyone was told to use before it expired has just stopped expiring.

What the amending decision actually says

Ministerial Decision No. 131 of 2026 has two operative articles and one of them is the publication clause. Article One replaces Clause 2 of Article 2 of Ministerial Decision No. 73 of 2023 with this:

"2. The threshold set out in Clause (1) of this Article shall apply to Tax Periods commencing on or after 1 June 2023 and such threshold shall continue to apply to subsequent Tax Periods that end on or before 31 December 2029."

Set that beside the sentence it replaced, from the 2023 decision:

"2. The threshold set out in Clause (1) of the Article shall apply to Tax Periods commencing on or after 1 June 2023 and such threshold shall only continue to apply to subsequent Tax Periods that end before or on 31 December 2026."

Two edits: the year, and the deletion of the word "only". That is the whole amendment. The decision was issued on 29 July 2026 and takes effect the day following its publication — note the contrast with the parent decision, which came into force fifteen days after publication.

It is worth being precise about what was extended, because the drafting extends the threshold, not the relief. Article 21 of the Corporate Tax Law is the relief; Ministerial Decision 73 is the instrument that gives the threshold a number and a lifespan. When the lifespan of the threshold ran out at the end of 2026, the relief had no figure to operate on. Pushing the threshold's expiry to 2029 is therefore the same thing in substance as extending the relief, but if you are reading the decisions rather than the press coverage, that is the mechanism you will see.

The four things the extension did not touch

Most commentary on the extension stops at the date. The rest of Ministerial Decision 73 is unamended and still decides who actually benefits.

The extension is, in other words, three more years of exactly the same bargain. If the bargain was a bad one for your business in 2026 — and for some businesses it is — three more years of it does not improve the arithmetic.

The threshold test looks backwards, and that is permanent

This is the provision most often described loosely, and the imprecision costs businesses the relief. Article 2(3) reads:

"A Taxable Person shall not be able to elect to apply the Small Business Relief if their Revenue in any relevant or previous Tax Period has exceeded the threshold set out in Clause (1) of this Article."

The test is not "was your revenue under AED 3 million this year". It is "was your revenue under AED 3 million this year and in every previous tax period". One year above the line disqualifies you from the relief permanently — a business that turned over AED 4.3 million in 2025 and AED 1.9 million in 2026 cannot elect for 2026, and cannot elect in 2027, 2028 or 2029 either, however small it becomes. The FTA's own worked example on its Small Business Relief page uses exactly this fact pattern.

That makes the extension asymmetric in who it helps. It is worth the most to a business that has never crossed AED 3 million and does not expect to; it is worth nothing to a business that crossed once. The extension did not reset the clock, because Article 2(3) was not amended.

One further definitional point: Article 2(4) states that Revenue is determined "in accordance with the applicable accounting standards accepted in the State". The test runs on revenue, not on profit and not on taxable income — a business making a loss on AED 5 million of turnover is outside the relief, while a business making AED 900,000 of profit on AED 2.9 million of turnover is inside it.

What electing costs you: losses and interest, forfeited

Articles 4 and 5 are symmetrical and they are the reason the relief is not free. In a period where you elect:

• Tax Losses incurred in that period cannot be carried forward to any subsequent period. Not deferred — gone (Art. 4(1)).
• Net Interest Expenditure incurred in that period cannot be carried forward either (Art. 5(1)).

Both articles then preserve the other direction: unutilised Tax Losses and Net Interest Expenditure from earlier non-electing periods survive, and may be carried forward into subsequent periods in which you again do not elect, subject to Articles 37 and 30 of the Corporate Tax Law respectively. Read carefully, that means an election does not destroy your existing stock of losses — it parks it. What it destroys is whatever the electing year itself generates.

So the decision each year is a genuine one, and for a loss-making business it usually goes the other way. Consider a business with AED 2 million of revenue that loses AED 400,000 in 2027 and expects to make AED 900,000 in 2028:

Illustrative arithmetic on our part, applying the 0%/9% bands and the carry-forward rules above; it is not drawn from any official example. It assumes the loss is available in full in 2028 and ignores the 75% cap in Article 37 of the Corporate Tax Law, which does not bite at these amounts. Your own figures and any other reliefs will change the answer.

Electing in a loss year buys nothing — the tax was already zero — and throws away a deduction worth 9% of the loss later. The relief earns its keep in profitable years under the threshold, and the extension means you now get to make that call separately in each of 2027, 2028 and 2029. The election is made per tax period; nothing obliges you to be consistent.

Splitting the business to stay under AED 3M

Article 6 anticipates the obvious response to a revenue cliff. Where the Authority establishes that one or more persons have artificially separated their business, and revenue across the whole of it exceeds AED 3 million in any tax period, and the relief has been elected, that "would be considered an arrangement to obtain a Corporate Tax advantage" under Article 50(1) of the Corporate Tax Law — the general anti-abuse rule.

Article 6(2) sets out how the Authority decides. It considers whether the arrangement "was undertaken for a valid commercial purpose", and whether the persons "carry on substantially the same Business or Business Activity", taking into account all relevant facts and circumstances, "including but not limited to their financial, economic and organisational links".

Two observations of ours on how that is drafted, flagged as ours. First, the list of links is explicitly non-exhaustive — "including but not limited to" — so the three named factors are a floor rather than a checklist to be argued around. Second, the test pairs a purpose limb with a substance limb, and a separation can be commercially genuine in origin yet still look like one business in operation; the wording does not say the two limbs are alternatives, and a structure that depends on winning only one of them is not a comfortable position. Where a group of related entities each sits just under AED 3 million and all of them elect, the contemporaneous record of why they are separate is the asset worth having.

Electing the relief does not excuse you from filing

The most expensive misreading of Small Business Relief is that zero taxable income means nothing to submit. The Federal Tax Authority has said the opposite in terms: eligibility for the relief "does not remove the obligation to file a Corporate Tax return". Electors file a simplified return, not no return, and it is filed on the ordinary deadline — within nine months of the end of the tax period.

Deadline passed. For every business whose tax period ended on 31 December 2025 — for most calendar-year companies their second Corporate Tax return, not their first — that nine-month deadline was 30 September 2026, and the FTA did not extend it. Small Business Relief electors were inside that deadline, not outside it. What a late return costs even at zero tax: the deadline and penalties guide.

Record-keeping is likewise unaffected by the election. The FTA's position is that records of transactions during the tax period, of assets, of liabilities and of shares or ownership interests must still be kept. There is one genuine compliance saving in the relief, and it is narrow: a person applying it is not required to prepare transfer pricing documentation, though the arm's length principle continues to apply to their related-party dealings. Simplified filing and a documentation exemption are worth having. They are not the same as being outside the regime.

Registration is a separate obligation again, and the relief has never touched it. Every taxable person must register with the FTA regardless of profit or relief, with an AED 10,000 penalty for registering late.

Who this changes something for

• A profitable business under AED 3M that has never crossed it. The clearest beneficiary: three more years in which a profitable year can be zeroed. Elect year by year, and skip the election in loss years.
• A business that crossed AED 3M once, in any year. Nothing changes. Article 2(3) locked you out permanently and MD 131 did not reopen it.
• A Qualifying Free Zone Person. Still excluded by Article 3(2) — but you are already on 0% on qualifying income, so the relief was never the point. What matters to you is holding QFZP status, not this.
• A member of a multinational group. Still excluded by Article 3(1), by reference to the definition in Cabinet Decision No. 44 of 2020.
• A start-up burning cash. Think before electing. A loss year plus an election equals a forfeited loss, and the tax saved was zero anyway.
• Anyone who restructured in 2026 to land under AED 3M. The extension makes the position durable and therefore makes Article 6 more worth the Authority's attention over a longer horizon, not less.

Frequently asked questions

Sources

• Extension — Ministerial Decision No. 131 of 2026 (PDF), Ministry of Finance
• Parent decision — Ministerial Decision No. 73 of 2023 (PDF), Ministry of Finance
• Conditions and worked example — Small Business Relief, Federal Tax Authority
• Filing obligation for electors — FTA media centre
• Legislation library — Ministry of Finance · Federal Tax Authority

Corrected 23 September 2026: an earlier version described businesses with a tax period ending 31 December 2025 as filing their first return; Corporate Tax applies to periods starting on or after 1 June 2023, so for most calendar-year companies the first period was 2024 and this is their second return. The 30 September 2026 deadline itself is unchanged. Verified 22 September 2026. Both Ministerial Decisions were downloaded as PDFs from the Ministry of Finance on the date of verification and read in full; the quoted text of Clause 2 of Article 2, in both its original and its replacement form, is taken from those documents and not from any summary. MD 131 of 2026 is a two-article decision and Article One is reproduced here in its entirety, so readers can see that the amendment is confined to the date. Articles 2(1), 2(3), 2(4), 3, 4, 5 and 6 of MD 73/2023 are quoted or paraphrased from the 2023 text, which MD 131 leaves in force. The filing and record-keeping statements come from the FTA's own media release and its Small Business Relief topic page. Three things in this guide are ours and are flagged where they appear: the two-year worked comparison of electing versus not electing in a loss year, which is illustrative arithmetic and not an official example; the two observations on how the artificial-separation test in Article 6(2) is drafted; and the reading that Article 21 of the Corporate Tax Law is the relief while MD 73 supplies the threshold that gives it effect. We have not located an English text of MD 131 on the Federal Tax Authority's own legislation page as at this date — the Ministry of Finance PDF is the source used. Nothing here is advice on your own position; a marginal case, particularly one involving related entities near the threshold, should be documented and put to a professional adviser or to the Authority.

Related

• Corporate tax calculator — the 0%/9% bands with the relief and the QFZP option built in.
• Business setup cost calculator — what the company cost before it earned anything to tax.
• Corporate Tax for individuals — for freelancers the AED 1M threshold is mostly paperwork; with this relief the tax cliff sits at AED 3M.
• Corporate Tax losses — why electing in a small profit year can preserve brought-forward losses that the 75% rule would otherwise burn.
• Qualifying Free Zone Person — the free zone regime that shuts you out of this relief, and when leaving it pays.
• The 30 September deadline, now passed — AED 500 a month for a late return even with zero tax due, and what correcting an error costs from 1 October.
• eInvoicing below AED 50 million — the other compliance clock running for the same businesses, and the TIN inside your corporate tax TRN.
• eInvoicing penalties — six violations, three of them uncapped.
• VAT calculator — the AED 375,000 that means something quite different on the VAT side.