UAE SMEs Face New Music Fees as Tax Relief Is Extended

Two UAE rule changes deserve the attention of small and medium businesses. One imposes new costs on any establishment that plays music commercially. The other extends the tax relief smaller companies have had since corporate tax arrived.

Music licensing becomes mandatory

A commercial music licensing framework begins in December 2026. Ministerial Resolution No. 136 of 2026 establishes it, and the UAE Ministry of Economy and Tourism has published the Collective Management in Music Guide to explain how the system will work.

Under the framework, any business that plays or uses music commercially must hold a license. Restaurants, cafés, hotels, shopping centers, fitness venues, airlines, radio and television stations, and concert organizers all fall within its scope. The same applies to similar establishments where music is part of the operation.

The Emirates Music Rights Association and Music Nation will collect the fees. Both manage rights on behalf of composers, songwriters, singers, instrumentalists, record producers, and music publishers. A license is valid for one year and can be renewed. The cost varies with the nature of the music use and the size of the establishment.

Some users are exempt. Educational and academic institutions, government entities, national events, and private non-commercial celebrations do not have to pay. The Ministry may add further categories to the exemption list later.

The framework's stated aims: standardize licensing across the UAE, cut copyright violations, and make sure rights holders are compensated.

Ten percent of total licensing fees will go into a new Cultural Support Fund in the Field of Music. The fund provides financial, technical, and artistic support for composition, production, distribution, and live performance. It also supports emerging talent and initiatives to bring Emirati music to international audiences through cultural exchanges, export support, and global festivals.

SME tax relief runs to 2029

Separately, the UAE has extended its Small Business Relief program to December 31, 2029, under Ministerial Decision No. 131.

The UAE's corporate tax regime has applied to financial years beginning on or after June 1, 2023. The standard rate is 9% on taxable income above AED 375,000; income up to that threshold is taxed at 0%. For individuals running a business, corporate tax generally applies only when turnover from business activities exceeds AED 1 million in a calendar year.

Under the extension, businesses with annual revenue up to AED 3 million (US$816,882) can claim Small Business Relief for tax periods ending on or before December 31, 2029, if they meet the applicable conditions. That gives eligible SMEs another three years of access to relief — a longer runway during the transition to federal corporate tax.

The two measures operate in different registers, but they come from the same impulse. The music framework routes license revenue into the cultural sector through the support fund. The tax extension keeps corporate tax from reaching small companies too soon. Both give entrepreneurs a clearer picture of what operating in the UAE will cost in the years ahead.