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Requirement of corporate tax registration for taxable person claiming small business relief in UAE

Navigating Corporate Tax Registration for Small Business Relief in the UAE

On June 1, 2023, the United Arab Emirates (UAE) issued its Corporate Tax Law, which was a turning point in the country’s economic history. In the midst of all this ‘SMALL BUSINESS RELIEF’ in UAE was infact a big relief. The need that all taxable individuals and companies get a corporate tax identification number is an essential component of this legislation. Any individual or entity whose fiscal year begins on or after June 1, 2023,  will be subjected to a 9% corporate tax.

Let’s explore the essentials of corporate tax registration and shed light on the concept of small business relief, a vital component of this new taxation system.

Small Business Relief in UAE

Small business relief is a corporate tax provision designed to offer eligible businesses a respite from paying corporate tax. Essentially, it allows these businesses to be treated as if they have no taxable income for a specific tax period. This, in turn, translates to no corporate tax liability during that period. Some of the best tax service providers in Dubai could help your business largely by helping you understand the concept of Small Business Relief in UAE.

Eligibility Criteria for Small Business Relief

To qualify for small business relief, certain conditions must be met:

  1. UAE Residency: The taxable entity or individual must be a UAE resident.
  2. Revenue Threshold: The revenue generated by the business should not exceed AED 3 million in both the current tax period and the preceding one.
  3. Multinational Enterprise Group: The business should not be a constituent company of a multinational enterprise group.
  4. Qualifying Free Zone Status: The business should not be categorized as a qualifying free zone person.

How to Claim Small Business Relief in UAE

To benefit from small business relief, eligible entities or individuals must elect for small business relief. You must complete the relevant section of the corporate tax return and attach any supporting documentation. The supporting documentation may include audited financial statements, management accounts, or other evidence of your revenue.

Once you have submitted your corporate tax return, the Federal Tax Authority (FTA) will review your election and determine whether you are eligible for small business relief. If you are eligible, the FTA will notify you and you will not have to pay any corporate tax.

Corporate Tax Registration Requirement

Here comes a crucial point: even though businesses claiming small business relief don’t have to pay corporate tax, they are still obligated to register for corporate tax.

  • You must still file a corporate tax return each year, even if you are claiming small business relief.
  • You must keep records to demonstrate your eligibility for the relief.
  • If your revenue exceeds the AED 3 million threshold in any subsequent tax period, you may be required to pay corporate tax.

This requirement applies to all taxable individuals and entities in the UAE, regardless of their taxable income. Corporate tax registration is a legal necessity that ensures compliance with the tax regulations of the country.

The Registration Process

Registering for corporate tax in the UAE is a straightforward process. The Federal Tax Authority (FTA) facilitates online registration through its user-friendly website. In just a few steps, entities can complete the registration process efficiently.

In essence, the Corporate Tax Law in the United Arab Emirates (UAE) necessitates the compulsory registration of all persons and businesses subject to taxation, irrespective of their eligibility for small business relief. Although this may appear paradoxical to individuals anticipating alleviation, it highlights the significance of strict compliance with tax legislation within the nation.

It is critical to understand that claiming Small Business Relief does not relieve corporations of their need to file an annual corporate tax return or to keep documents proving their eligibility for the relief. Companies must meet this condition in order to be eligible for the relief. Furthermore, enterprises must be aware that if their revenue exceeds the AED 3 million barrier during any succeeding tax period, they may be compelled to make payments to complete their corporate tax responsibilities.

Should you have any queries or concerns regarding corporate tax registration, small business relief, or taxation matters in the UAE, it is advisable to seek guidance from a qualified tax advisor. Understanding and complying with the UAE’s tax regulations will help businesses operate smoothly within the country’s evolving financial landscape.

If you have any queries or concerns regarding corporate tax registration, small business relief, or taxation matters in the UAE, it is advisable to seek guidance from a qualified tax advisor.  Catalyst Taxes is one of the best Tax service providers in UAE. With a team of experienced and  expert Financial Reporting Specialists in Dubai they can offer you unmatched assistance at a cost effective price. They having the  reputation of being one of the  financial reporting services providers in  UAE will help your businesses operate smoothly within the country’s evolving financial landscape.

Contact Catalyst services today by email –, call – @ +971 54 728 4285,  Dubai, United Arab Emirates.

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