United Arab Emirates Tax Updates May 2023

Blog Article

Ministerial Decision on Corporate Tax Relief for Small Businesses and Startups

On 3 April 2023, the Ministry of Finance (“MoF”) issued Ministerial Decision No.73 of 2023 with regards to details on the Small Business Relief with a sunset clause by 31 December 2026..

The taxable person with revenue of AED 3 million or less for the relevant tax period and previous tax years are eligible to claim Small Business Relief. This relief will not be available to Qualifying Free Zone Persons and members of Multinational Enterprises Groups that have consolidated group revenues of more than AED3.15 billion.

Ministerial Decision No. 43 of 2023 on exception from Corporate Tax Registration

On 10th March 2023, the MOF issued the Ministerial Decision with regards to exception from Corporate Tax (CT) registration. It includes:

Government Entities

Government Controlled Entities

Persons engaged in Extractive Business

Persons engaged in a Non-Extractive Natural Resource Business

Non-Resident Persons that derive only UAE sourced income and does not have a Permanent Establishment in the UAE.

Ministerial Decision No. 82 of 2023 on categories of Taxable Persons required to prepare and maintain audited financial statements:

It provides that the following Taxable Persons shall prepare and maintain audited financial statements:

Taxable Persons deriving revenues exceeding AED 50 Million.

Qualifying Free Zone Persons (QFZP).

The UAE Tax Authorities have issued following other Regulations in connection with UAE CT in the month of April 2023:

Federal Tax Authority Decision No. 5 of 2023

The Taxable Person can make an application to the Authority to change the start and end date of the Tax Period, or use a different Tax Period

Federal Tax Authority Decision No. 6 of 2023

This decision specified the timelines for the taxable person to apply for Tax Deregistration – for natural and legal persons.

Federal Tax Authority Decision No. 7 of 2023

This decision delineates certain procedures for registration and application for exemption under the UAE CT Law.

Ministerial Decision No. 83 of 2023

This decision specifies the conditions that would not create a Permanent Establishment for a Non-Resident Person while the natural person is present in the UAE.

Ministerial Decision No.68 of 2023

Ministerial Decision on single taxable person for Federal Government Entities and Local Government Entities

Cabinet Decision No. 37 of 2023

The decision provides a list of entities established for the benefit of the public and in turn should be considered as a QPBE.

Notice regarding extension of increased import duty on rebar & wire rod

Dubai Customs has extended the increase of import duty on rebar and wire rod from 5% to 10% vide Customs Notice No. (02/2023) issued on 3/4/2023. The increased duty will be applicable until October 12, 2025.

Suspension of importing and registering electric Volkswagen cars

Dubai Customs vide Notice No. (03/2023) issued on 10/4/2023 has temporarily suspended import of electric Volkswagen vehicles unless imported for the purpose of re-export with effect from 13/3/2023.

Notice on submission of Customs Declaration and Required Documents

Dubai customs vide Notice (04/2023) has declared the timeline for submission of documents, fee for late submission and conditions for exception from submission of documents. The notice issued on 14th April 2023 has come into force from April 24, 2023, and supersedes and revokes earlier notices issued in this regard.

Notice regarding extension of temporary suspension of export of ferrous scrap and waste paper

The Dubai Customs has extended the temporary suspension of export of ferrous scrap and paper waste under specific HS codes for a period of 3 months. Customs Notice No. (05/2023) was issued on 19/4/2023 and is effective from 20th March 2023.

UAE-Israel Comprehensive Economic Partnership Agreement (CEPA) enters into force

It was signed on May 31, 2022, will come into effect on April 1, 2023. This means that tariffs will be removed or reduced on more than 96 percent of product lines, which covers 99 percent of the UAE’s trade with Israel. Access to Israel’s domestic services market for UAE businesses including financial services, communications, tourism, transportation, and distribution.

Article Topic

Tax advisory, Tax and Business Advisers