UAE announces corporate tax relief for small businesses, startups

UAE announces corporate tax relief for small businesses, startups

A revenue threshold was set and will apply to tax periods starting on or after June 1

Published: Thu 6 Apr 2023, 12:59 PM Last updated: Thu 6 Apr 2023, 1:06 PM

The UAE’s Ministry of Finance on Thursday announced relief for small and micro businesses, startups, and individuals under the corporate tax, which will come into effect from June 1, 2023.

The Ministerial Decision No.73 of 2023 on Small Business Relief specifies that businesses with revenues of Dh3 million or less can benefit from Small Business Relief and the conditions for Small Business Relief election.

The ministerial decision on small business relief stipulates the following:

Taxable persons that are residents can claim small business relief where their revenue in the relevant tax period and previous tax periods is below Dh3 million for each tax period. This means that once a taxable person exceeds the Dh3 million revenue threshold in any tax period, then the small business relief will no longer be available.

The Dh3-million revenue threshold will apply to tax periods starting on or after June 1, 2023, and will only continue to apply to subsequent tax periods that end before or on December 31, 2026.

Revenue can be determined based on the applicable accounting standards