Dubai, UAE, 25 April 2023: Dubai-based consultancy firm Al Dhaheri Jones and Clark (ADJC), a registered tax agent in the UAE as approved by the Federal Tax Authority (FTA), has lauded the government’s recently announced tax relief policy for small businesses earning below AED 3 million.
ADJC said the decision of the Ministry of Finance would strengthen the financial standing of small businesses, allowing them to further invest in their research and development endeavors, innovate, and compete. The tax relief would also enable small enterprises, which are considered the backbone of the UAE’s economy, to fund more projects and programs critical to their growth.
Per the announcement of the Ministry of Finance, small businesses whose revenues in a relevant tax period and previous tax periods fall below AED 3 million for each tax period are qualified to avail of the relief enacted to reduce the tax burden and compliance costs of start-ups and small or micro businesses in the country.
The AED 3-million revenue threshold will apply to tax periods starting on or after June 1, 2023 and will only continue to apply to subsequent tax periods that end before or on December 31, 2026. Qualifying free zone persons or members of the multinational enterprise groups are not qualified to apply for the new tax relief program.
The Ministry of Finance issued the decision based on Article 21 of the Corporate Tax Law.
ADJC commends the UAE Government’s decision to provide tax relief to small businesses. This is a significant step towards supporting the country’s economic development and diversification, as it will further attract more investments to the country. It also reflects the government’s commitment to maintain an investment-friendly environment and sustain the UAE’s status as a global hub for businesses.
ADJC will continue to support and assist small businesses in terms of their tax obligations and compliance. As a tax expert with an in-depth knowledge of the taxation system in the country and the region, the company remains committed to providing small businesses with financial advice and services that meet their unique needs.