Ministry of Finance issues decision on small business relief for corporate tax purposes

Great news for small businesses in Abu Dhabi! On April 6, 2023, the Ministry of Finance in Abu Dhabi, UAE issued Ministerial Decision No. 73 of 2023 to provide Small Business Relief under Federal Decree-Law No. 47 of 2022 on the Taxation of Corporations and Businesses, also known as the Corporate Tax Law. This decision has been issued in accordance with Article 21 of the Corporate Tax Law, which means that if your revenue doesn’t surpass a certain threshold, you won’t have to pay any Corporate Tax in UAE. Small Business Relief aims to ease the tax burden and compliance costs for small and micro businesses, including start-ups. To qualify, you must meet specific conditions outlined in the decision, including the revenue threshold. Plus, the decision clarifies the rules for carrying forward Tax Losses and disallowed Net Interest Expenditure. Don’t miss this fantastic opportunity to save on UAE Corporate taxes and boost your business!


The Ministerial Decision on Small Business Relief outlines the following:-

i) Resident taxable persons with revenue below AED3 million in the relevant tax period and previous tax periods can claim Small Business Relief. If a taxable person exceeds the AED3 million revenue threshold in any tax period, they won’t be eligible for Small Business Relief anymore.

ii) The AED3 million revenue threshold applies to tax periods beginning on or after 1 June 2023 and only continues to apply to subsequent tax periods ending on or before 31 December 2026.



iii) Revenue can be determined based on UAE’s accepted accounting standards.

iv) Qualifying Free Zone Persons and members of Multinational Enterprises Groups (MNE Groups) defined by Cabinet Decision No. 44 of 2020 won’t be eligible for Small Business Relief. MNE Groups are companies with consolidated group revenues of more than AED3.15 billion, operating in multiple countries.

v) If businesses choose not to apply for Small Business Relief in certain tax periods, they can carry forward any incurred Tax Losses and disallowed Net Interest Expenditure from those periods to use in future tax periods when they don’t elect for Small Business Relief.

vi) If taxable persons artificially separate their business or business activity and the total revenue of the entire business exceeds AED3 million in any tax period, while electing for Small Business Relief, it’ll be considered an arrangement to gain Corporate Tax advantage under Clause (1) of Article 50, which is subject to the general anti-abuse rules of the Corporate Tax Law.


Small Businesses in UAE Can Save on Corporate Tax with experts Assistance

In light of the recent decision by the Ministry of Finance in Abu Dhabi, UAE, small businesses in the country have a chance to benefit from corporate tax relief. Elevate , as a professional auditing and tax consultancy firm, can assist small businesses in understanding the eligibility criteria and complying with the requirements to claim Small Business Relief. By taking advantage of this relief, small businesses can reduce their tax burden, increase their profitability, and contribute to the growth of the economy.

With the clarity provided in the decision on carrying forward Tax Losses and disallowed Net Interest Expenditure, Elevate can assist businesses in making informed decisions by optimum use of tax planning that positively impact their financial position. The firm continues to stay up-to-date with the latest regulations related to Corporate tax in UAE.

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