Do I still need to register for Corporate Tax if I claim Small Business Relief?

Article 21 – Small Business Relief 1. A Taxable Person that is a Resident Person may elect to be treated as not having derived any Taxable Income for a Tax Period where: a. the Revenue of the Taxable Person for the relevant Tax Period and previous Tax Periods does not exceed a threshold to be set by the Minister; and b. the Taxable Person meets all other conditions prescribed by the Minister. 2. Where Clause 1 of this Article applies to a Taxable Person, the following provisions of this Decree-Law shall not apply: a. Exempt Income as specified in Chapter Seven of this Decree-Law. b. Reliefs as specified in Chapter Eight of this Decree-Law. c. Deductions as specified in Chapter Nine of this Decree-Law. d. Tax Loss relief as specified in Chapter Eleven of this Decree-Law. e. Article 55 of this Decree-Law. 3. The Authority may take the necessary measures to verify the compliance with the conditions of Clause 1 of this Article, and may request any relevant information or records from the Taxable Person within the timeline prescribed by the Authority. Federal Decree-Law No. 47 of 2022 and its amendments – Unofficial translation (as published by the Ministry of Finance) 28 Chapter Seven – Exempt Income

Compliance obligations, record keeping requirements and administration for Small Business Relief Requirement to self-assess, register and make an election In order to claim Small Business Relief, the eligible Taxable Person must first be registered for Corporate Tax. It then can elect for the relief through the filing of a Tax Return. An election must be made in each Taxable Period. An eligible Taxable Person that has elected for Small Business Relief remains a Taxable Person for the purposes of the Corporate Tax Law. This means that it will continue to be required to meet its Corporate Tax compliance obligations in each Tax Period. This includes the obligation to register for Corporate Tax, file a simplified Tax Return and retain all relevant documents and records to support their Corporate Tax filings. Requirement to file Tax Returns Businesses will be required to make the election for Small Business Relief in their Tax Return. Therefore, the requirement to file Tax Returns is not impacted by the eligibility for the Small Business Relief. Businesses that elect for the Small Business Relief will however benefit from a simplified Tax Return, reducing the amount of information they need to provide, and the amount of time needed to complete the Tax Return. Records required to be kept to demonstrate Revenue The Corporate Tax Law includes a number of record-keeping requirements. These are in addition to the requirements already imposed on Businesses and their agents by the Tax Procedures Law. Under the Corporate Tax Law, all Businesses are required to maintain records and documentation that: ● support the information provided in a Tax Return or in any other document to be submitted to the FTA;61 and ● enable the Taxable Person’s Taxable Income to be readily ascertained by the FTA.62 61 Article 56(1)(a) of the Corporate Tax Law. 62 Article 56(1)(b) of the Corporate Tax Law. Corporate Tax Guide | Small Business Relief | CTGSBR1 37

As the election must be made in the Corporate Tax Return, the Taxable Person electing for small business relief must register for Corporate Tax before they can make the election. Example 16: Small business relief Company L is incorporated in Sharjah and earns Revenues of AED 2,500,000 in the Tax Period 1 January 2024 to 31 December 2024, and would like to claim small business relief. Even though Company L’s Revenue for a Tax Period remains under AED 3,000,000, meeting the conditions to be eligible for small business relief does not affect the Corporate Tax compliance obligations that Company L has as a Resident Person. Therefore, Company L will be required to register for Corporate Tax. Corporate Tax Guide I Registration of Resident Juridical Persons I CTGRJP1 28