Is Small Business Relief applied automatically?

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

The rules on Exempt Income therefore do not apply to businesses that elect for Small Business Relief.24 More information on the treatment of Exempt Income when electing for Small Business Relief can be found in Section 5.3. How to elect for Small Business Relief Eligible Taxable Persons that meet the conditions for Small Business Relief and wishing to benefit from Small Business Relief must first register for Corporate Tax. Then they must make an election in their Tax Return in order to benefit from the relief. This election must be made for each Tax Period that a Tax Return is filed in order for the relief to apply for that Tax Period. More information on Tax Returns and broader compliance requirements when electing for Small Business Relief can be found in Section 6. 24 Article 21(2)(a) of the Corporate Tax Law. Corporate Tax Guide | Small Business Relief | CTGSBR1 18

Article 3 – Additional Conditions for Small Business Relief A Resident Person that elects to apply the Small Business Relief must not be any of the following: 1. A Constituent Company of a Multinational Enterprises Group as defined in Cabinet Decision No. 44 referred to. 2. A Qualifying Free Zone Person.

  Federal Tax Authority You can make the election to apply the 'Small Business Relief'. You are only entitled to this relief if your revenue is AED 3 million or less. If you are entitled for small business relief, you should answer 'Yes\No' to the question: 'Is the Taxable Person a member of a Multinational Enterprise Group?'. Taxpayer User Manual - Corporate Tax Return Page 38

Article 4 – Tax Loss Relief 1. Where an election to apply the Small Business Relief is made in a Tax Period, any Tax Losses incurred in such Tax Period cannot be carried forward to any subsequent Tax Periods. 2. Any unutilised Tax Losses incurred in previous Tax Periods where an election to apply the Small Business Relief was not made, may be carried forward to subsequent Tax Periods in which an election to apply the Small Business Relief is not made, subject to the conditions of Article 37 of the Corporate Tax Law.