Corporate tax (CT) compliance is crucial for UAE businesses and can only be achieved by a proper comprehension of the CT laws. Companies must know their standings and liabilities accurately, e.g., whether they are exempt and, if so, why they are exempt and how they can remain exempt.
Tax Gian is equipped with professional corporate tax consultants in the UAE who are devoted to helping businesses comply with tax laws and enjoy tax benefits wherever possible.
Who is Exempt from Corporate Tax (CT) in the UAE?
Certain businesses or business activities are exempt from CT in the UAE. These are called “exempt persons” under the law. There are categories of exemptions, i.e., some persons have to apply for CT exemption, and some are exempt by default. Let’s look into these categories and understand the CT exemption better:
- Exempt “by Default”
This category includes business and business activities that are automatically exempt from CT in the UAE and don’t need to apply for an exemption. They are exempt because some other laws in the country indeed govern them. These include;
- Government entities
- Entities controlled by the government and specified in a Cabinet Decision.
Application: As per Decision No. 43 of 2023, these businesses do not need to apply and register for CT in the UAE. Also, these do not need to apply to avail the exemption status. However, in future, if a business activity is performed which is not exempt from CT, then CT registration will be required for that activity.
Still confused? Ask corporate tax consultants in the UAE for details on the matter.
- Exempt after “Notifying the MoF”
This category includes businesses and business activities that have notified the Ministry of Finance and meet the Ministry’s conditions to avail the CT exemption. These include;
- Businesses involved in the extraction of natural resources
- Non-extractive natural resource businesses
Application: As per Decision No. 43 of 2023, these businesses do not need to apply and register for CT in the UAE. Also, these do not need to apply to avail the exemption status. However, in future, if a business activity is performed which is not exempt from CT, then CT registration will be required for that activity.
- Exempt if “Listed in a Cabinet Decision”
This category includes business and business activities that are mentioned in the Cabinet Decision No. 37 of 2023 and qualify as “qualifying public benefit entities” according to the decision.
Application: As per Decision No. 7 of 2023, these entities need to register for CT and obtain a TRN (Tax Registration Number). Moreover, these businesses also need to file annual declarations to confirm that they still qualify for the CT exemption. Corporate tax consultants in Dubai can help you learn how you can maintain your exempt status.
- Exempt after “Applied and Approved by the Authority”
This category includes businesses that apply for the CT exemption to the Authority (which is the Federal Tax Authority in the case of CT), and the Authority approves the application. The authority will only approve if certain conditions are met. The business activities that can apply to the FTA for a CT exemption include;
- Qualifying investment funds
- Social security or regulated social security
- Public pension or regulated private pension
- A juridical person, completely owned and managed by exempt persons, exercising some or all business activities of the same exempt person.
- A juridical person, completely owned and managed by exempt persons, investing funds or holding assets on behalf of the same exempt person.
- A juridical person, completely owned and managed by exempt persons, undertaking activities ancillary to those executed by the same exempt person.
Application: According to Decision No. 7 of 2023, these businesses need to register and obtain a TRN. After that, these can apply to the authority to obtain the exemption only if they meet certain conditions. Moreover, these businesses also need to file annual declarations to confirm that they still qualify for the CT exemption.
You can inquire about your specific obligations and liabilities from corporate tax consultants in Dubai.
How can Tax Gian help?
Tax Gian experts help you:
- Understand your legal standing and comply better with the tax laws.
- Resolve tax issues seamlessly so that business growth is not affected.
Avail tax benefits where possible
