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UAE CT Update: Corporate Tax Exemption for Public and Community Welfare Entities

Entities eligible for exemption are those that prioritize philanthropy, community services, and corporate social responsibility initiatives

The UAE Ministry of Finance (MoF) said public benefit entities that contribute to the welfare of society are eligible for tax exemptions under the country’s corporate tax law.

“The MoF unveiled a UAE Cabinet new implementing decision relating to qualifying public benefit entities for the purposes of the corporate tax law, which is designed to ensure that entities existing and operating for the wider public benefit are eligible for tax exemption,” the ministry of finance said in a tweet.

The tax exemption is designed to reflect these entities’ important role in the country, which often includes religious, charitable, scientific, educational or cultural value. The UAE said to qualify for the exemption, eligible entities must meet the conditions specified in Article 9 of the corporate tax law and must maintain compliance with all relevant federal and local laws.

The ministry called on all qualifying public benefit entities to register with the UAE Federal Tax Authority and obtain a tax registration number for corporate tax purposes.

 

The entities must also inform the ministry of any changes that may affect their status as qualifying public benefit entity.

In addition, various reporting obligations apply to Qualifying Public Benefit Entities, principally to check that they continue to meet the criteria for approval.

This Cabinet Decision also provides further certainty and transparency for taxpayers in relation to their deductible expenditure under Article 33 of the Corporate Tax Law, as donations and gifts will be allowed as deductible expenditure for Corporate Tax purposes if they are made to a Qualifying Public Benefit Entity listed in the Cabinet Decision.

Earlier, the Ministry announced corporate tax exemptions for non-resident persons, government entities, government-controlled entities, as well as extractive businesses and non-extractive natural resource businesses.

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Source: https://mof.gov.ae/

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