MINISTERIAL DECISION NO. 73 OF 2023 ON SMALL BUSINESS RELIEF
– Defines the threshold and additional criteria for individuals including resident person , non resident person and members of Multinational Enterprises Groups (MNE Groups).MNE Groups are groups of companies with operations in more than one country that have consolidated group revenues of more than AED 3.15 billion.
Who is eligible?
- Resident Person & Free Zone Persons (excluding Qualifying Free Zone Persons)
- Previous Tax Period Revenue is less than AED 3 million.
- The Current Tax Period Revenue is less than AED 3 million.
- Not Members of Multinational Enterprises Groups (MNE Groups).
Who is not eligible?
- Non-Resident Person & Qualifying Free Zone Persons.
- If the Previous Tax Period Revenue is more than AED 3 million and the Current Tax Period Revenue is less than AED 3 million.
- If the Previous Tax Period Revenue is less than AED 3 million and the Current Tax Period Revenue is more than AED 3 million.
- Members of Multinational Enterprises Groups (MNE Groups).
How does it work: Application?
Assessing eligibility for relief once a year is mandatory.
- Starting 1st June 2023, the threshold will apply.
- Only valid for tax periods that end before or on 31st December 2026.
How should entities proceed?
- Register and file corporate tax returns on time.
- Due to the claim of Small Business Relief, the person’s taxable income will be nil Business Relief.
What kind of entities should file for relief?
- Entities that make taxable profits.
- Entities that failed to remove net interest expenditures from such tax periods.
What kind of entities should not file for relief?
- Entities that have losses and want to carry those losses forward.
- Entities that have removed net interest expenditures from such tax periods.
COMPANY DIVISION TO UTILIZE THE RELIEF
The General Anti-Abuse rule of the corporate tax law’s corporate tax advantage under Clause (1) of Article 50 is applicable if:
- An individual who is subject to taxation has artificially divided their business or commercial activity &
- The total revenue of all such enterprises or commercial operations in any tax period exceeds AED 3 million &
- He/she has opted to apply for Small Business Relief for a business or a business activity.
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