Last Updated on: 15th July 2023, 10:34 am
UAE Announced Big Tax Relief For Startups, Freelancers, And Small Businesses
The Ministry of Finance (MoF) of the United Arab Emirates (UAE) has decided to grant significant tax breaks to small businesses, freelancers, and start-ups effective June 1st this year in order to create a favorable environment for them. surcharge
Eligible companies and individuals must have an income of no more than AED 3 million to qualify for this relief. Under this program, qualifying entities can apply for a “small business relief” that reduces the corporate income tax they pay.
According to Ministerial Decision No. 73 of 2023, companies and individuals with incomes lower than the previous figure can benefit from this relief.
Last year, the UAE government announced it would impose a 9% profit tax on companies with a turnover of more than AED 375,000.
In the meantime, those who do not apply for this relief can carry forward their tax losses to reduce their taxes in the future.
At this point, it should be mentioned that this relief is not for everyone. Eligible Free Zone Persons and members of Multinational Enterprise Groups (MEGs) with operations in more than one country and a total turnover of more than AED3.15 billion are not eligible.
Also, if a company earns more than AED 3 million and tries to avoid taxes by dividing the company into smaller parts, it is illegal. This step is called “artificial separation of the company”. Therefore, companies involved in such activities are also not eligible for small business support.
Also Read: UAE Hosts A Massive Ramadan Sale With Up To 75% Off 10,000 Products