[World Tax News] UAE Releases Corporate Tax Guide on Small Business Relief and More

Editorial Team – [2023] 154 taxmann.com 163 (Article)

World Tax News provides a weekly snippet of tax news from around the globe. Here is a glimpse of the tax happening in the world this week.

1. UAE releases Corporate Tax Guide on Small Business Relief

The UAE Federal Tax Authority (FTA) has released a guide outlining corporate tax provisions for Small Business Relief. This guide offers comprehensive information on the Small Business Relief for Corporate Tax in the UAE, covering key aspects such as:

• What the Small Business Relief is;
• Who is eligible for it;
• How it works;
• How long is it available, and
• Related compliance requirements

Under the Small Business Relief, taxpayers can opt for a treatment where they are considered not to have earned any taxable income for a given tax period, provided their revenue in current and preceding tax periods remains below AED 3 million, subject to specific conditions.

In other words, taxpayers with revenue below the AED 3 million threshold may be exempted from paying taxes. Moreover, those who utilize this relief will also enjoy simplified procedures for filing tax returns and maintaining records. This includes the option to prepare financial statements using the cash basis of accounting.

This relief is applicable for tax periods commencing on or after June 1, 2023, and concluding on or before December 31, 2026.

Source: Corporate Tax Guide CTGSBR1

2. USA mandates e-reporting of cash payments over $10,000

On August 30 2023, The Internal Revenue Service (IRS) announced a significant change set to take effect on January 1, 2024. Businesses will be mandated for electronic filing (e-filing) of Form 8300, commonly known as the ‘Report of Cash Payments Over $10,000,’ replacing the conventional paper filing method.

This transformation aligns with recent regulatory updates that have amended e-filing procedures for various information returns, including Form 8300.

Businesses that receive cash payments exceeding $10,000 are legally obligated to report these transactions to the U.S. government. While most cash transactions are legitimate, the data recorded on Form 8300 plays a crucial role in combating tax evasion, curbing illicit profits from activities like drug trafficking, preventing terrorist financing, and deterring other criminal endeavours. Timely, complete, and accurate submissions of Form 8300 often enable the government to trace funds from these illegal activities.

The new e-filing requirement for Form 8300 applies to businesses already subject to e-filing mandates for specific other information returns. This shift toward electronic filing and communication promises a more streamlined process and enhanced interaction with the IRS. Beginning with the calendar year 2024, businesses will be obliged to e-file all Forms 8300 and certain other information returns required for a given calendar year if they are mandated to file at least 10 information returns, excluding Form 8300.

Source: Release dated 30-08-2023

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