UAE : Corporate Tax

Corporate tax exemption for public and community welfare entities

The Ministry of Finance in the UAE has announced that entities that contribute to the welfare of the public and society will be exempt from corporate tax, which will be implemented this year.

The exemption applies to companies involved in public welfare, philanthropy, community services, and corporate social responsibility. The decision recognizes the significant role played by these entities in the UAE, which often involves religious, charitable, scientific, educational, or cultural activities.

To be eligible for the exemption, these entities must meet the conditions set out in Article (9) of the Corporate Tax Law and comply with all relevant federal and local laws, and they must register with the Federal Tax Authority and obtain a Tax registration number for Corporate Tax purposes. The schedule of Qualifying Public Benefit Entities may be modified by the Cabinet upon the Minister's recommendation, and entities listed in the schedule must notify any changes occurring to them. Reporting obligations also apply to ensure that these entities continue to meet the criteria for approval.

The Cabinet Decision also allows donations and gifts to be deducted as expenditure for corporate tax purposes if they are made to a Qualifying Public Benefit Entity listed in the Cabinet Decision. In addition, earlier, the Ministry had announced corporate tax exemptions for non-resident persons, government entities, government-controlled entities, extractive businesses, and non-extractive natural resource businesses.