The United Arab Emirates (UAE) has introduced a new corporate tax regime, governed by Cabinet Decision No. 60 of 2023, which aims to promote business growth and investment in the country. As part of this regime, the Small Business Relief (SBR) mechanism has been established to provide tax relief to eligible small businesses. SBR is designed to support small businesses by reducing their tax burden, allowing them to retain more of their profits and reinvest them in their operations. By providing tax relief to eligible small businesses, the UAE government aims to foster entrepreneurship, innovation, and economic growth in the country.
What is Small Business Relief?
Small Business Relief (SBR) is a tax relief mechanism that allows eligible small businesses to be exempt from paying corporate tax or to be subject to a reduced tax rate. The Small Business Relief allows eligible businesses in the UAE to be treated as if they have no taxable income, thereby exempting them from paying corporate tax.
Who is Eligible for Small Business Relief?
To be eligible for SBR, a business must meet the following criteria:
- Taxable income: The business's taxable income must not exceed a specified threshold (AED 375,000).
- Not a member of a multinational enterprise group: The business must not be a member of a multinational enterprise group.
- Not a Qualifying Free Zone Person: The business must not be a Qualifying Free Zone Person.
Which Person Does Not Qualify for Small Business Relief?
The following persons do not qualify for SBR:
1. Member of Multinational Enterprise Group (MNE): Businesses that are part of a multinational enterprise group are not eligible for SBR.
2. Qualifying Free Zone Person: Businesses that are Qualifying Free Zone Persons are not eligible for SBR, as they are subject to a different tax regime.
Documents Required for Small Business Relief
To claim Small Business Relief (SBR) in the UAE, businesses may need to provide the following documents:
- Financial statements: Audited financial statements or tax returns showing taxable income.
- Business license: A copy of the business license or registration certificate.
- Tax registration certificate: A copy of the tax registration certificate.
- Other supporting documents: Additional documents may be required to support the SBR claim, such as proof of business income and expenses.
How Can Reyson Badger Help You?
Reyson Badger, a leading tax consultancy firm in the UAE, can assist businesses in claiming Small Business Relief by:
- Determining eligibility: Assessing whether a business meets the eligibility criteria for SBR.
- Preparing and submitting documents: Assisting with the preparation and submission of required documents.
- Ensuring compliance: Ensuring compliance with UAE tax laws and regulations.
FAQs
What is SBR in UAE?
SBR stands for Small Business Relief, a tax relief mechanism introduced by the UAE government to support small businesses.
What is a Relief in Business?
A relief in business refers to a tax exemption or reduction provided to businesses that meet specific criteria, aiming to reduce their tax burden and promote growth.
What is Small Business Relief in the UAE?
Small Business Relief in the UAE is a tax relief mechanism that provides eligible small businesses with reduced tax liabilities or exemptions, helping them retain more of their profits and reinvest in their operations.