What is the revenue limit for Small Business Relief?

Article 2 – Taxable Person’s Revenue Threshold 1. For the purposes of the Small Business Relief referred to in Article 21 of the Corporate Tax Law (“Small Business Relief”), the Taxable Person’s Revenue threshold for the relevant Tax Period and previous Tax Periods shall be AED 3,000,000 (three million dirhams) for each Tax Period. 2. The threshold set out in Clause 1 of the Article shall apply to Tax Periods Ministerial Decision No. 73 of 2023 – Unofficial translation 1 commencing on or after 1 June 2023 and such threshold shall only continue to apply to subsequent Tax Periods that end before or on 31 December 2026. 3. A Taxable Person shall not be able to elect to apply the Small Business Relief if their Revenue in any relevant or previous Tax Period has exceeded the threshold set out in Clause 1 of this Article. 4. The Revenue for the purpose of this Article shall be determined in accordance with the applicable accounting standards accepted in the State.

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

A Tax Group is able to elect for Small Business Relief if its Revenue is equal to or below AED 3,000,000. As a single Taxable Person, the Revenue threshold for Small Business Relief will apply to the Tax Group as a whole, rather than to each member of the Tax Group. Irrespective of how many companies make up the Tax Group, the Revenue threshold of AED 3,000,000 will apply to the Tax Group as a whole. Example 18: Tax Groups and Small Business Relief ABC LLC is the Parent Company of a Tax Group, which also includes its whollyowned subsidiaries XYZ LLC and DEF LLC. During its Tax Period ending 31 July 2024, ABC LLC itself had Revenue of AED 1,300,000, XYZ LLC had Revenue of AED 900,000 and DEF LLC had Revenue of AED 1,000,000. None of the Revenues of ABC LLC, XYZ LLC and DEF LLC are earned from each other. The total consolidated Revenue for the Tax Group (after netting of intra-group transactions) was therefore AED 3,200,000 (AED 1,300,000 + AED 900,000 + AED 1,000,000). Although each of the companies has Revenue below the threshold for Small Business Relief, the Tax Group will not be eligible for Small Business Relief. This is because the Tax Group is treated as a single Taxable Person, and the Tax Group’s overall consolidated Revenue of AED 3,200,000 is above the Small Business Relief threshold of AED 3,000,000. Corporate Tax Guide | Small Business Relief | CTGSBR1 36