UAE publishes list of entities exempt from corporate tax

ABU DHABI – The Ministry of Finance has issued Ministerial Decision No. 43 of 2023 regarding exceptions to tax registration for the purposes of Federal Decree No. 47 of 2022 on Taxation of Companies and Enterprises (Corporate Tax Law).

The decision was issued under Section 51 of the Corporation Tax Act, which requires taxpayers to register for corporate tax with the Federal Tax Office, subject to certain exceptions.

The Ministerial Decision on Exceptions to Tax Registration sets out who will be excluded from corporate tax registration.

Certain exemptions include government entities, government-controlled entities, extractive businesses, and non-extractive natural resource businesses that meet the requisite conditions under the corporate tax law and are not required to register for corporate tax purposes.

Non-residents are also not required to register for corporate tax if they only earn UAE-sourced income and do not have a permanent establishment in the UAE.

The exceptions set out in the decision are in line with international best practice whereby persons exempt from corporate tax, such as the Federal Government, UAE ministries and authorities, other public bodies and the other categories mentioned above, are exempt from tax registration as they are not required to pay tax.

Therefore, registration with the Federal Tax Office is not required for these entities as long as they continue to meet the exemption conditions set out in the relevant provisions of the decree.