The United Arab Emirates (UAE) Ministry of Finance (MoF) has decided to provide significant corporation tax relief to startups, freelancers, and small businesses beginning on June 1 of this year in order to foster an atmosphere that would allow them to expand without being burdened further.
To be eligible for this exemption, firms and individuals must have annual revenues of AED 3 million or less. This programme allows qualifying businesses to apply for “Small Business Relief,” which reduces the amount of corporation tax they must pay.
Businesses and individuals may take advantage of this exemption if their revenue is less than the amount specified above, according Ministerial Decision No. 73 of 2023.
The UAE government had declared last year that it will levy a nine percent tax on company earnings.
Those who do not seek for this assistance are still able to carry their tax losses forward to lower their future taxes.
It is important to note that not everyone will be a good fit for this plan. People who qualify for the free zone and MEG members with activities in more than one countries and annual revenues above AED 3.15 billion are not eligible.
Additionally, it is unlawful for a firm with a revenue of more than AED 3 million to divide itself into smaller entities in order to evade taxes. The phrase “artificial separation of the business” refers to this action. Therefore, companies engaged in such activities will not also qualify for Small Business Relief.
