The UAE Ministry of Finance has issued a decision on Small Business Relief for Corporate Tax purposes.
The Small Business Relief is intended to support start-ups and other small or micro-businesses by reducing their Corporate Tax burden and compliance costs.
Small Business Relief
The Taxable Person’s Revenue for the relevant Tax Period and previous Tax Periods shall not exceed AED 3,000,000 (three million dirhams) for each Tax Period.
The threshold 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.
Persons not eligible for relief
A Constituent Company of a Multinational Enterprises Group as defined in Cabinet Decision No. 44 of 2020.
A Qualifying Free Zone Person.
If artificially separated business activities exceed AED 3 million, the taxable person may not be eligible for small business relief.
Tax Losses
Where an election to apply the Small Business Relief is made in a Tax Period, any Tax Losses incurred in such Tax Period cannot be carried forward to any subsequent Tax Periods.
Get the most out of small business relief.
Companies meeting the Revenue threshold should take advantage of Small Business Relief to reduce their Corporate Tax burden and compliance costs.
We can review the eligibility criteria and tax loss provisions to ensure full compliance with the tax regulations.
We will ensure that your books of accounts are accurately maintained in compliance with the IFRS standards and the revenue guidelines issued by the tax department.
We can assist your small business in demonstrating to the tax department that your revenue is below the threshold limit of AED 3 million, and avoid any potential compliance issues or penalties.
