Corporate Tax Exemptions & Incentives in the UAE: Who Qualifies?
Corporate tax is one of the major direct taxes in the United Arab Emirates that is imposed on the net profits or income of corporations and businesses in the UAE. All businesses and corporations fall under the scope of registering and paying corporate tax in the UAE. However, there are some exemptions to the corporate tax. This article will mainly describe corporate tax exemptions and incentives in the UAE and who will be able to get these exemptions.
Tax Gian are professional and approved tax agents who have expertise in corporate tax and its latest trends in the UAE. By acquiring our assistance, you can resolve any corporate tax matter. Our experts will guide you on how you can qualify for various tax exemptions and incentives in the UAE.
Exemptions from Corporate Tax in UAE
According to the Federal Tax Authority, the following are the categories of exempt persons from corporate tax in the UAE;
- Persons who are automatically exempt
These include government entities. Registration for corporate tax is not required for government entities.
- Persons who notify the MoF and meet the criteria for exemption
These include extractive businesses as well as non-extractive natural resource businesses. Registration for corporate tax is not required for such businesses.
- Persons who are listed in a Decision from the Cabinet and meet the criteria for exemption
These include qualifying public benefit entities and government-controlled entities. These entities have been required to register since 1 Oct 2023.
- Persons who apply to the FTA and FTA approves as well as they meet the criteria for exemption
These include subsidiaries of exempt persons that are completely controlled and owned by the exempt persons inside the UAE. Also, private and public social security funds and pensions, and qualifying investment funds are also included in these. These entities have been required to register for corporate tax in UAE since 1 June 2024.
Other Exemptions
In addition, corporate tax does not apply to the following;
- Employment income or any earning of an individual that is a salary issued by a private or public employer.
- Income or interest earned from deposits in banks or savings schemes by any individual.
- Income earned by a foreign investor from investment returns, royalties, capital gains, dividends, etc.
- Any individual’s income, capital gains, dividends earned from shares or other agreements.
Incentives for Small Businesses
Any juridical or natural person also called a resident person can apply and receive small business relief from corporate tax in UAE. Application for small business relief is required for every taxable period. The revenue generated by the business in the present and past tax periods should be less than or equal to 3,000,000 AED. And this incentive is available up to 31 December 2026.
The Relief: Small businesses that qualify for relief are treated like they didn’t earn any taxable income in the taxable financial year. TP (transfer pricing) documentation is also not required for small businesses. But they have to conform to the arm’s length principle. Moreover, when a small business is getting this relief, no other incentive, relief or exemption will be given to that small business.
Lastly, sometimes businesses are subject to a lot of tax incentives but they are unaware of it. You must get assistance from tax experts like Taxgian in UAE to know how you can qualify to get tax incentives while doing business in UAE.
Why Choose Tax Gian?
Corporate tax compliance and requirements are things that simple accountants cannot manage. You need expert tax agents especially when you are a growing firm/business in UAE. Tax Gian is your one-stop solution for every tax issue. Not only corporate tax, you will get tailored services related to any tax in the UAE e.g., value-added tax, excise tax, etc. Taxation and compliance will become seamless for you once you get in touch with experts at Taxgian. What are you waiting for?
