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UAE : Corporate Tax

Tax Relief for small businesses earning Dh 3 Million or less

According to a statement from the UAE's Ministry of Finance, small businesses in the UAE with a revenue of Dh3 million ($816,880) or less can benefit from a new corporate tax relief program.

The Small Business Relief scheme is intended to support start-ups and small or micro businesses by reducing their corporate tax burden and compliance costs. The scheme specifies the revenue threshold and conditions for a taxable person to be eligible for the program.

Taxable persons who are resident in the country can claim Small Business Relief when their revenue in the relevant and previous tax periods is below Dh3 million for each period. However, once a taxable person exceeds that threshold in any tax period, they will no longer be eligible for the scheme. The threshold will apply to tax periods starting on or after June 1, 2023, and will continue to apply only to subsequent tax periods that end before or on December 31, 2026.

The UAE's corporate tax law exempts certain entities, including those involved in natural resource extraction activities in the country, but they are still subject to existing local emirate-level tax. Existing free zone entities are also exempt from corporate tax because they are among the drivers of the UAE's economic growth.

The scheme will not be available to qualifying free zone persons or members of multinational enterprises groups that have consolidated group revenues of more than Dh3.15 billion.


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