This decision will give more clarity to Article 21 of Corporate Tax Law, especially on the threshold for applying for small business reliefs.
Small business relief is mainly to support and promote start-ups and other micro or small businesses by reducing compliance costs and corporate tax burdens. Through this decision, the Ministry has clarified the following aspects;
| Details | Clarifications from the authority |
| The threshold for applying for the small business relief | Upto AED 3 Million in a tax year. |
| The validity of the threshold decided | from 01st June 2023 till 31st December 2026 |
| Accounting standard for determining the revenue | Applicable accounting standard accepted in the UAE. |
| Non-applicable categories | Qualifying Free Zone companiesMulti-National Entities whose global turnover is more than AED 3.15 Billion in a year. |
| Tax Loss and disallowed net interest expenditure from a tax year in which small business relief is not elected | This can be carried forward to the subsequent tax years |
| GAAR provisions | Authority will consider the total revenue of the entire business or business activity, in case of any artificial separation of the business or business activity for Corporate Tax advantage. |
Kindly get in touch with us for further consultation on Corporate Tax regulations.
To learn more about Understanding Ministerial Decision No.73 on Small Business Relief, book a free consultation with one of the Flyingcolour team advisors.
Disclaimer: The information provided in this blog is based on our understanding of current tax laws and regulations. It is intended for general informational purposes only and does not constitute professional tax advice, consultation, or representation. The author and publisher are not responsible for any errors or omissions, or for any actions taken based on the information contained in this blog.