11 April 2023
Relief for businesses with revenue less than AED 3 million. No penalty for
voluntary disclosures related to unintentional tax errors
Who is eligible for
Corporate Tax relief?
Taxable persons who are residents are eligible for Small Business Relief if
their revenue for the current and previous tax periods is less than AED 3
million per tax period.
The AED3 million revenue threshold will apply to two tax periods beginning on 1
June 2023 and will continue to apply only to tax periods ending on or before 31
Small Business Relief is not automatic; therefore, a taxpayer who qualifies for
this Relief must elect for its application and meet all other conditions.
Who is excluded
from Small Business Relief eligibility?
An eligible Free Zone Person
A Constituent Company of a Multinational Enterprises Group (MNE Groups) with operations
in more than one country and consolidated group revenues exceeding 3.15 billion
artificial separation of Business or business activity to meet the AED 3
Million thresholds and to take advantage of the Small Business Relief, would be
considered an arrangement to obtain a Corporate Tax advantage.
No penalty on
voluntary disclosures related to unintentional tax errors rules the Federal
decision distinguishes between an "unintentional error in calculating the
tax" and a "voluntary disclosure of errors in the tax return or
assessment," the Court ruling grants taxpayers a more lenient approach to
amending their tax returns.
to Cabinet Decision No. 40/2017, taxpayers who submit incorrect tax returns or
assessments are subject to penalties. By treating certain voluntary disclosures
as an inadvertent error correction, the court effectively eliminates the legal
basis for imposing such penalties.
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