A. Corporate Tax Updates
In order to alleviate the burden of corporate tax and compliance costs for small and micro businesses, earlier, the Ministry of Finance had released Ministerial Decision No. 73 of 2023 on Small Business Relief (SBR). Now, the FTA has released a detailed guide for the SBR and clarified ambiguities regarding SBR. Below are Key highlights of SBR.
1. All Resident Taxable Persons are eligible if the threshold for the relevant Tax Period and previous Tax Periods shall be AED 3,000,000 or below for each Tax Period.
2. Threshold shall apply to Tax Periods 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. The below person is not eligible for SBR.
- A Constituent Company of a Multinational Enterprises Group has a turnover of more than AED 3.15 Billion.
- A Qualifying Free Zone Person
If a business owner opts for SBR, they will not be required to pay corporate tax during the relevant periods. However, registration for CT and filling of annual CT return will be mandatory.
B. VAT
As per Article 6 of Federal Law No. (7) of 2017 on Tax Procedures, A registrant must Inform the FTA, in the form prepared by it, of the occurrence of any circumstance that might require the amendment of information related to his Tax record kept by the Authority within 20 business days from the occurrence of such circumstance.
The failure of the Registrant to inform the Authority of any circumstance that requires the amendment of the information pertaining to its Tax record kept by the Authority shall attract a penalty of AED 5,000 for the first time and AED 10,000 in case of repetition.
C. Economic Substance Regulation (ESR)
The Company carrying relevant activities as mentioned in ESR law must submit a Notification within six (06) months from the end of the Financial Year and submit an ESR report prescribed under the ESR Regulations within twelve (12) months from the end of the Financial Year. Below are the due date for the respective Financial year.
FY ending on March 31, 2023
Notification by Sept 30, 2023
Reporting by March 31, 2024
Additionally, to log in on the ESR portal, the same must be linked with the UAE Pass.
Please take a moment to review the information provided, and don’t hesitate to reach out to us with any questions or concerns you may have. We are here to support you every step of the way.
