corporate law
The mission of the United Arab Emirates through corporate law is to achieve tax justice and increase income to achieve economic development. In this context, the Ministry of Finance Innovative No. (73) of 2023 was issued to activists with small business facilities, thanks to the popularity of Federal Law No. (47) of 2022 in addition to startup companies, also known as the Corporate Innovation Law.
It is designed to support small or very small startups with a lead corporate manager and significant costs. It specifies a specific type of income and conditions that a taxable person must meet from small business nominations.
What qualifications are required for small business qualifications?
Invitees, whether they are natural persons or persons with a credit score, can opt for small business liquidations if they meet the following conditions:
Facilities must be selected for each tax period.
– Their income must be equal to or equal to the collection of AED 3,000,000 in each tax period and in all previous tax taxes.
What are the benefits of small business facilities?
Small businesses that do not receive any taxable income during the general tax period are treated as small business facilities. Therefore, it is not necessary to compensate documents with variable pricing, but should start with the discount price. It should be noted that other exemptions, facilities and discounts do not apply to these companies.
Who can't choose small business questions?
There are some situations in which people cannot choose small business facilities, including:
– They are expected to exceed the annual income limit of AED 3,000,000.
– Companies owned by the other version of the tax.
– Companies with a prohibited designation specified in the law.
He pointed out that there are some exceptions and additional details regarding small business facilities and their tax returns and regulations issued by the Federal Tax Authority in the Kingdom of Saudi Arabia. So, it was processed by checking the official objective to get the latest information and guidance about companies and small business facilities in the country.
professional tax
Therefore, it is advisable to consult a professional tax advisor or the ultimate tax authority to obtain updated and accurate information as well as small and corporate tax facilities in the UAE.
The Ministry of Finance of the United Arab Emirates issued Contribution No. (73) of 2023 in addition to small business facilities in accordance with Federal Decree Law No. (47) of 2022 due to the start-up tax. This project was designed in particular to define the plan that is applied by virtue of the fact that in Article No. (21) of the Corporate Discrimination Law, according to which persons who did not distinguish any double tax within the specified percentage and whose revenues did not exceed a certain level, are treated with discrimination and could not From access to tax.
These facilities aim to support emerging and small start-up companies, by reducing taxes and reducing tax costs. It sets out the small business allotments and limits on the revenue a taxable person must make from these facilities. It also explains avoiding tax cuts and non-banking net incentive funds for small business deductions.
According to their decision, a person can be targeted for corporate tax for small business facilities if their contribution does not exceed 3 million dirhams through the general tax category and previous general taxes. Therefore, if a person’s taxable income exceeds this limit during any tax period, he or she may be able to afford small business facilitation.
Tax revenues
The AED 3 million limit applies to tax revenues beginning on or after 1 June 2023, and this revenue limit will continue to apply to subsequent tax periods ending before or on 31 December 2026.
Official Small Business Facilities for Eligible Persons Don’t finish the last part of your message indicating that the text was cut off unexpectedly. Please provide me with the missing part of the message so that I can fully assist you.
Small Business Requirements Requirements
These companies limit the requirements to the series of rules that regulate the status of a taxable person, whether resident or non-resident, qualifying as an entity based in an autonomous territory or a member of a multinational group.
Regarding income, the related requirements that must not be exceeded to obtain these facilities, in addition to the tax periods in which these facilities are designed.
We will review in detail the details of small tasks serving companies in the UAE.
First, the taxable person must be a resident. The concept of person includes every person or entity that has been controlled, recognized or recognized under the laws of the UAE for corporate preparation. The same applies to entities identified in the country under laws relating to major lands or jurisdiction in free zones. The residence relates in particular to foreign companies or in particular in relation to whether they are named or controlled effectively in the country, taking into account the specific circumstances of each entity.
Secondly, excluding qualified persons working in free zones and members of multinational corporate groups except, You will benefit from small business facilities in accordance with Article Three of the Ministerial Resolution regarding small business facilities for corporate tax purposes.
Third, resident persons are entitled to benefit from small business facilities if their revenues do not exceed the amount specified in Article Two of the Ministerial Resolution, which amounts to 3,000,000 (three million) UAE dirhams. This limit applies as of tax periods beginning on June 1, 2023, and continues to apply for subsequent tax periods.
Fourth, a resident who wishes to avail the small business facility must submit a corporate tax return along with the required supporting documents. The return must be identical to the tax return form approved by the Federal Tax Authority.
Finally, the resident must comply with all other tax obligations and applicable laws and regulations of the UAE.
It should be noted that these requirements may change over time, and it is always important to check current laws and regulations for the latest information and tax requirements for small business facilities in the UAE.
What are the benefits of small business facilities?
The essence of small business facilities is to reduce tax burdens and compliance costs, as the person subject to tax under these facilities is treated as if they had not generated any taxable income during specified tax periods.
According to Article 21 of Federal Decree No. 47 of 2022 relating to corporate and business tax, a resident taxable person has the right to choose to be treated according to the fact that he did not generate any taxable income during a certain tax period, provided that the following conditions are met:
– Taxable revenues must not exceed 3 million dirhams for each tax period and previous tax periods.
– Meeting the conditions specified in Ministerial Resolution No. 73 of 2023 regarding small business facilities for the purposes of the Corporate Tax Law.
It is clear from the previous text that the law restricts the right to benefit from small business facilities to taxable resident persons, who are persons created and recognized in accordance with the laws of the UAE, in addition to foreign companies that are effectively controlled and managed in the country.
corporate groups
Therefore, eligible persons working in free zones or companies that are members of multinational corporate groups cannot claim small business facilities. These companies relate to those that operate in more than one country and generate combined revenues of more than AED 3.15 billion.
Resident persons subject to corporate tax can claim small business facilities if their revenues for the relevant tax period and previous tax periods do not exceed 3 million dirhams for each tax period. The resident person must comply with all his tax and tax registration obligations, and pay the taxes due in a timely manner in accordance with the tax laws of the UAE. The resident who has chosen to apply for the Small Business Facility must not be a member of a multinational corporate group or an eligible person operating in a free zone. The revenue limit must be determined in accordance with applicable accounting standards accepted in the country.
The UAE Corporate Tax Law No. 47 of 2022 aims to provide tax facilities to companies classified as small businesses. According to the law, a company’s revenue must be less than AED 3 million per tax period. Companies classified as small businesses are entitled to benefit from tax facilities, including tax deferral and reduced tax burdens. Companies classified as small businesses must comply with specific conditions to obtain these facilities, including a revenue limit and not belonging to a multinational group or free zone.
Corporate taxes in the UAE
Corporate taxes in the UAE are calculated based on the profits made by the company during the tax period. According to Federal Law No. 7 of 2017, corporate tax is imposed at a rate of 5% on profits made by companies in the country. Companies classified as small businesses are entitled to benefit from tax facilities, including tax deferral and reduced tax burdens. Companies classified as small businesses must comply with specific conditions to obtain these facilities, including a revenue limit and not belonging to a multinational group or free zone.
Investing in the Middle East
The Middle East region is considered one of the most important regions in terms of trade, logistics, and establishing companies and businesses in the world. This is because of its ideal strategic location, which is the mediator between the East and the West, and is considered the State of Egypt and the State of the Emirates