Growth Partners

Corporate Compliance Services

Small Business Relief

The implementation of UAE Federal Decree-Law No. 47 of 2022, which introduced Corporate Tax (CT) effective from June 1, 2023, marks a pivotal transformation in the UAE’s economic landscape.

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Service Description

At the heart of this legislative shift is the Small Business Relief initiative, a key strategy designed to foster the growth and sustainability of small enterprises within the UAE’s dynamic economic framework. This initiative not only aligns with the UAE government’s vision for a diversified and balanced economy but also highlights the essential role small businesses play in achieving this vision.

The Small Business Relief offers practical advantages, including:

  1. Administrative Simplification: Eligible small businesses are exempt from the complexities of Corporate Tax (CT) calculation, greatly reducing administrative burdens. This enables businesses to concentrate on core operations, while cash-basis financial reporting further simplifies tax compliance.
  2. Financial Incentive: The Corporate Tax exemption under this relief provides a direct financial benefit, giving businesses greater flexibility to reinvest in key areas that drive innovation and growth.

 

Eligibility and Application Overview:

The Small Business Relief is aimed at resident taxable entities with annual revenues up to AED 3 million, ensuring broad support for small businesses. However, entities that are part of Multinational Enterprise Groups with revenues exceeding AED 3.15 billion, as well as Qualifying Free Zone Persons, are excluded from this relief to ensure it benefits those who need it most.

The Essential Role of Accounting and Auditing:
Although the Small Business Relief simplifies tax compliance and offers financial incentives, maintaining robust accounting and auditing practices is still vital.

Accurate financial reporting is critical for businesses to demonstrate compliance with Corporate Tax (CT) regulations and to fully leverage the benefits of the Small Business Relief. Proper accounting and auditing practices ensure financial integrity and transparency, which are essential for successfully navigating the UAE’s evolving tax landscape.

Services and Objectives
Growth Partners  Group provides expert services to help small businesses navigate the eligibility assessment and application process for the Small Business Relief. Our knowledge ensures that businesses not only meet regulatory requirements but also strategically position themselves to maximize the benefits of this initiative.

By engaging our services, particularly alongside accounting and auditing support, businesses can adopt a comprehensive approach. This alignment is crucial for optimizing the advantages of the Small Business Relief, fostering growth, and boosting competitiveness in the UAE market.

Our objective is to guide small businesses through this transition, enabling them to capitalize on every opportunity for sustainable development and success in the post-Corporate Tax landscape.

The information provided is not intended as a direct or implied recommendation or endorsement of any specific strategy, decision, or action. Clients are advised to consult with their tax, legal, or professional advisors to assess the relevance and applicability of the information to their individual circumstances. Growth Partners  Group disclaims any responsibility for errors or omissions in the information, or for any loss or damage incurred by any party relying on it. Use of and reliance on the information is at the user’s own risk.

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Frequently Asked Questions

Learn more about company formation in the United Arab Emirates

In the United Arab Emirates, you can establish entities like Limited Liability Companies (LLC), Free Zone Entities, Sole Proprietorships, and Branches of Foreign Companies.

The company formation process in the UAE can take anywhere from a few days to several weeks, depending on the type of company and the specific requirements involved.

The United Arab Emirates offers a tax-free environment for most businesses, with no personal or corporate income tax, provided the company qualifies for Free Zone status.

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