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Small Businesses and Startups in UAE to Receive Corporate Tax Relief


The UAE’s Ministry of Finance has recently announced tax relief measures for small and micro businesses, startups, and freelancers under the corporate tax. This move is aimed at providing much-needed support to small businesses and reducing their corporate tax burden and compliance costs. The relief measures will come into effect from June 1, 2023, and will continue to apply until December 31, 2026.

Small Business Relief Initiative

According to Ministerial Decision No. 73 of 2023, individuals and companies with annual revenues of AED 3 million or less are eligible for the Small Business Relief program. By lowering their corporate tax burden and regulatory costs, this initiative aims to benefit start-ups and other small enterprises.

The UAE government announced a nine percent tax on businesses’ revenues over AED 370,000 last year. The AED 3 million revenue barrier will be in effect for tax periods beginning on or after June 1, 2023, and it will only continue to be in effect for consecutive tax periods that conclude prior to or on December 31, 2026.

Claiming Small Business Relief

In accordance with the program, taxable residents who have revenue in the relevant tax period and the two prior tax periods that is less than AED 3 million for each tax period are eligible to apply for Small Business Relief. This means that startups and small enterprises can take advantage of tax relief measures to lower their tax obligations and free up resources for growth and expansion.

Carrying Forward Tax Losses

Businesses that do not elect to apply for Small Business Relief will still have the option to carry forward any incurred tax losses and any disallowed net interest expenditure from such tax periods for use in future tax periods, as defined in the Ministerial Decision.

Artificial Separation of Business

With regard to the artificial separation of business, if taxable persons have artificially separated their business or activity and the total revenue exceeds AED 3 million in any tax period and such persons have elected to apply for Small Business Relief, this would be considered an arrangement to obtain a Corporate Tax advantage under Clause (1) of Article 50 regarding the general anti-abuse rules of the Corporate Tax Law.

Exclusions from Relief Measures

The Ministry has clarified that the relief measures will not be available to qualifying free zone persons or members of Multinational Enterprises Groups with operations in more than one country and consolidated group revenues of more than AED 3.15 billion. It is important for businesses to carefully assess their eligibility for relief measures and consult with a tax professional if necessary.


A positive step towards encouraging entrepreneurship and advancing economic growth is the UAE government’s tax reduction program for small enterprises and startups. The Small Business Relief project will enable qualified enterprises to pay less in taxes and concentrate on growing their operations. To manage the difficulties brought on by the COVID-19 epidemic and beyond, it is critical for small enterprises to comprehend the qualifying requirements and make use of the relief measures.

The information provided here is sourced from a news article that was published by the Khaleej Times on Thursday, April 6th, 2023.