MCA Management Consultants helps businesses explore small business relief for tax benefits

Small Business Relief (SBR) is a crucial government initiative aimed at supporting small businesses by simplifying their tax compliance processes and offering potential reductions in their tax liabilities. With its extensive experience in tax advisory services, MCA Management Consultants aims to educate and assist eligible businesses in harnessing the benefits of SBR.

To qualify for Small Business Relief (SBR), the following criteria must be met:

• The Taxable Person must be a Resident Taxable Person, whether a Natural or Juridical Person.

• The Revenue of the Taxable Person for the Tax Period should be below or equal to Dh3,000,000.

• It's important to note that to claim this relief, the revenue for both the relevant Tax Period and the previous Tax Periods must be Dh3 million or below for each respective Tax period.

Small Business Relief (SBR) is not available to Non-Resident Taxable Persons (except in certain cases), Qualifying Free Zone Persons, and Entities that are part of Multinational Enterprise (MNE) groups with a revenue of AED 3.15 billion.

Eligibility period

Small Business Relief (SBR) can be claimed for Financial Years falling between 1 June 2023 and 31 December 2026. The duration of relief that can be claimed depends on the Financial Year being followed and can be either 2 or 3 years.

Eligible Revenue is calculated by components, which are included in the calculation of eligible revenue. These include income from all sales made by the business, income from the sale of assets and barter sales and exempt income, such as dividends.

Benefits of SBR

Eligible Taxable Persons have the option to elect for Small Business Relief (SBR) in their Tax Return. Once this election has been made, it cannot be amended. Upon election, they will enjoy the benefits such as completion of a simplified Tax Return, and no requirement to pay any Corporate Tax on income earned.

You also get an exemption from maintaining Transfer Pricing documentation related to Transfer Pricing disclosure and Master/Local file maintenance. However, compliance with the Arm’s Length Principle

Evaluation to be done prior to claiming SBR

While Small Business Relief (SBR) offers significant advantages, it's important to be aware of its limitations. Tax Loss Relief (i.e., carry forward of tax losses) and carry forward of net interest expenditure are not available to those claiming SBR.

Also care to be taken that there is no artificial separation of business. In such cases General Anti-Avoidance Rules may apply and the Tax Authority could disregard the benefits claimed under SBR.

Business should properly evaluate their profitability and eligibility prior to opting for SBR.

In a bid to assist eligible resident businesses in streamlining their tax obligations and easing their financial burdens, MCA Management Consultants, a renowned player in the consulting industry, is promoting Small Business Relief (SBR) advisory services.MCA was established in the year 2009 and today ranks amongst the reputed professional services firm providing multi-disciplinary services in Audit, Assurance, Taxation, Corporate Services, Corporate Finance, Strategy, Accounting/CFO Services, Transformative Technologies and Asset Management Solution.