UAE Corporation Tax: A round up of relief measures for SMEs

UAE Corporation Tax: A round up of relief measures for SMEs

The UAE is a popular destination for entrepreneurs with numerous initiatives designed to ease the process of doing business. When the Federal Tax Authority introduced its new rules on corporation tax in late 2022 some wondered whether the move might slow down start-up growth in the Emirates; however, the government has introduced a range of relief measures in line with its commitment to support SMEs.

Rayhan Aleem, Founder and Managing Partner of the customer focused accounting firm Alpha Pro Partners commented: “like all companies, SMEs need to be aware of the corporate tax rules, understand their implications, and factor them into accounting processes. It can be overwhelming as there is a lot of information circulating from different sources, not all of it accurate. But SMEs should know that there is plenty of help available so they can continue to thrive.”

There have been 24 pieces of legislation released since the announcement of Corporation tax in the UAE. Here are the key takeaways that affect entrepreneurs.

- Annual income subject to Corporation tax (as per cabinet decision No. 116 of 2022)

Smaller companies may not have corporation tax to pay based on their profit threshold.

- Taxable profits not exceeding AED 375k – 0% corporate tax.

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