UAE to Offer Relief on Corporate Tax for Small Businesses and Startups

  • Publish date: Thursday، 06 April 2023
UAE to Offer Relief on Corporate Tax for Small Businesses and Startups

The Ministry of Finance in the UAE has declared relief measures for small and micro-enterprises, startups, and individuals in relation to corporate tax, which will be implemented from June 1, 2023. The Ministerial Decision No.73 of 2023 outlines that businesses with revenues of Dh3 million or less will be eligible for Small Business Relief and must meet the conditions for its election.

The ministerial decision on small business relief stipulates the following:

Taxable residents can claim the relief if their revenue in a given tax period and preceding periods is less than Dh3 million per tax period. This means that the relief will cease once the Dh3 million revenue threshold is exceeded in any tax period.

The Dh3 million revenue limit will be applicable for tax periods starting from June 1, 2023, and concluding on or before December 31, 2026.

Revenue can be evaluated based on the UAE's accepted accounting standards.

Qualifying free zone persons and members of multinational enterprise groups are not eligible for small business relief under the new Ministerial Decision. However, businesses that do not elect to apply for relief can carry forward any incurred tax losses and disallowed Net Interest Expenditure for future use in tax periods where Small Business Relief is not elected.

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