Ministry Of Finance Issues Decision On Exception From Registration For Corporate Tax

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11 Apr 2023

UAE Corporate Tax Exemptions

The Ministry of Finance has recently released a new Ministerial Decision, no. 43 of 2023, that provides exceptions from tax registration for Corporate Tax Law purposes. The decision was issued in compliance with Article 51 of the Corporate Tax Law, which requires taxable individuals to register with the Federal Tax Authority for Corporate Tax unless they meet specific requirements. In addition, the new decision outlines the categories of individuals and organizations exempt from registering for Corporate Tax.

The exemptions cover various entities, including government-controlled entities, extractive businesses, and non-extractive natural resource businesses that satisfy the necessary conditions outlined in the Corporate Tax Law. In addition, non-resident individuals are not required to register for Corporate Tax if they only generate UAE sourced income and do not have a Permanent Establishment in the UAE.

The Ministry's decision follows international best practices in exempting individuals or organizations from Corporate Tax registration if they are not subject to tax. This includes the federal government, UAE government departments and authorities, other public institutions, and the categories mentioned earlier. Accordingly, these entities will not need to register with the Federal Tax Authority if they continue to meet the exemption conditions mentioned in the relevant articles of the Decree-Law.

In conclusion, the Ministry of Finance's new decision clarifies the exceptions from tax registration for Corporate Tax purposes. The Ministry aims to promote international best practices by exempting certain individuals and organizations while facilitating compliance with the Corporate Tax Law.

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