The UAE government has introduced Small Business Relief SBR to support small businesses in the UAE amid corporate tax implementation.
If you’re an eligible resident taxable individual looking to submit your tax returns, you might want to consider the Simplified Business Regime (SBR). With the SBR, you’ll still need to register and submit a simplified tax return. You won’t have to calculate your taxable income and submit a full tax return. Plus, if your financial year ends on or before December 31, 2026, you’ll be exempt from paying any corporate tax.
If you are a resident taxable person, whether as a natural or juridical person, you may be eligible for tax relief. To qualify, your gross business income in the relevant tax period and any previous tax periods that end on or before December 31, 2026, should not exceed Dh3 million.
As required by article 21 of the law, if the gross income of the resident taxable person does not exceed a threshold set by the Minister (Dh3 million set through the Ministerial Decision No. 73 of 2023 issued on April 03, 2023), in the current and any previous tax periods, the taxable person may elect to be treated as not having derived any taxable income; and the provisions for the tax losses, tax relief, exempt income, deductions, interest limitations rules and transfer pricing documentation will not be applicable to such taxable persons but the person will be liable to register for corporate tax, follow the transfer pricing rules to establish the arm’s length price; and submit the simplified tax return.
Who can avail of Small Business Relief SBR UAE?
Only resident persons can avail of the SBR,
(i) the juridical person incorporated in the UAE, including free zones businesses,
(ii) the juridical person established out of the UAE but controlled and managed from the UAE,
(iii) any natural person who conducts a business or business activity in the UAE and
(iv) any other person determined in a decision issued by the Cabinet.
The Special Business Regulations (SBR) are not applicable to nonresident individuals, with the exception of their permanent establishment in the UAE.
Small Business Relief SBR UAE Eligibility
If you are a resident person, all your business activities, including those outside the UAE, will contribute to the total revenue of Dh3 million. The threshold mentioned above will also include the entire sales proceeds from the sale of assets, regardless of whether the income is from exempt or taxable sources. In case of any fragmentation, the FTA will consider the individual facts and circumstances, as well as financial, economic, and organizational links to determine commercial sense and genuine separation.
Businesses meeting certain gross revenue criteria should opt for SBR to enjoy tax relief.
Information Courtesy: https://www.khaleejtimes.com/business/corporate/uae-corporate-tax-small-businesses-can-opt-for-tax-relief-and-submit-simplified-tax-return?_refresh=true
Photo Courtesy: middleeastbriefing.com
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