The Corporate Profits Tax Law No. 47 of 2022, Article 21, stipulates the existence of tax facilities for companies classified as small businesses, and was issued by a ministerial decision of the Minister of Finance No. (73) of 2023 to clarify the conditions for the application of the facilities, and we list their details as follows:
First, the advantages obtained by the businesses that meet the conditions for obtaining the facilities are: -Copy
1- A Taxable Resident may choose to be treated as having not achieved any taxable income if the above conditions or any other conditions may be determined by the Minister are met.
Second: Conditions required to obtain the facilities available to small enterprises and companiesCopy
1-Revenue limit should not exceed AED 3 million for each tax period separately
This limit applies to periods starting on or after June 1, 2023
This limit continues to apply only to subsequent tax periods ending before or on 31 December 2026.
A Taxable Person may not choose to apply tax facilities for small businesses if his revenues in any relevant or previous tax period exceed the limit stipulated above.
The revenue limit must be determined in accordance with the accounting standards in force and accepted in the country
2-The resident who has chosen to apply the Small Business Facilities must not be any of the following:
A member company of a multinational group
Eligible person based in the free zone
3-No tax losses for the period in which the business chose to apply the small business facility may be carried forward to a later period.
4-In the event of choosing to apply small business facilities, any net interest expense incurred in that tax period may not be carried forward to another tax period.
5-The fictitious separation of business revenues to reach the stipulated limit for obtaining small business facilities is an arrangement for obtaining a corporate tax advantage.
6-In the event that the application of small business facilities is chosen, the provisions of the exempted income stipulated in Chapter Seven of Decree Law 47 of 2022 do not apply to it.
7-In the event that the application of small business facilities is chosen, the facilities stipulated in Chapter Eight of Decree Law 47 of 2022 do not apply to it.