Ministerial Decision no. 73 of 2023

on Small Business Refile



Article 21 of the Federal Decree-Law No. 47 of 2022 on the Taxation of Corporations and Businesses (the “Corporate Tax Law” / “CT law”) specifies ‘Small Business Relief’ (‘SBR’). As per the aforesaid article, a taxable person may elect to be treated as not deriving any taxable income during a given tax period, where the revenue of the taxable person does not exceed a prescribed threshold.


The Ministry of Finance (‘MoF’) of the United Arab Emirates (‘UAE’) has now prescribed the threshold for claiming SBR vide Decision No. 73 of 2023 on 06 April 2023 inter alia providing various provisions for availing SBR. The synopsis of the said Ministerial Decision has been captured below.



  • Only resident taxpayers can opt for this SBR.
  • The relief is not automatic and business needs to apply to the Federal Tax Authority (‘FTA’) to claim this SBR.



  • Revenues (determined in accordance with the applicable accounting standards accepted in the UAE) should be equal to or less than AED 3 million in the given and previous tax period.
  • The said threshold would apply to tax periods, starting on or after 1st June 2023 and ending on or before 31st December 2026.
  • It is pertinent to note that once the revenue of a taxable person exceeds AED 3 million threshold in any relevant or previous tax period, the SBR will not be available.


  • Qualifying free zone persons under Article 18 of the CT law.
  • Non-residents (i.e. UAE branches of a foreign company).
  • Group companies of MNE group crossing consolidated group revenues of AED 3.15 billion.

Opting out

  • The resident taxpayers have the option to opt-out of SBR.
  • Businesses which do not elect for SBR, will be able to carry forward any incurred tax losses and any disallowed net interest expenditure from such tax periods, for use in future tax periods in which the SBR is not elected.

Anti abuse provision

  • In case the FTA establishes that there is an artificial segmentation of operation into two or more separate businesses in such a way that on a standalone basis, individual businesses may qualify for the threshold relief, then provisions of General Anti Avoidance Rule may be invoked.

Our comments

The intention of the decision is to provide relief to small businesses like start-ups and other small or microbusinesses which are forming significant part of the UAE’s economy. While the intention of the FTA is to simplify the compliance obligations of small businesses with the release of this Cabinet Decision, however, there are certain compliances that are required to be undertaken by small businesses, which are as follows:

  • Corporate tax registration with the FTA.
  • Filing of corporate tax return.

There is an explicit relief provided to small businesses under Article 21 from the compliance burden of Transfer Pricing Documentation (under Article 55).

In view of above, small taxpayers should critically assess the conditions to opt-in or opt-out of the relief scheme by taking into account various aspects such as losses in the current period and potential future profits, business restructuring relief etc.


Contact Us

Rakesh Nair
Director, Corporate Tax
Rohit Kejriwal
Rohit Kejriwal
Senior Manager, Corporate Tax