The UAE has introduced tax exemption rules
The UAE Ministry of Finance has announced that some individuals are exempt from registration to pay corporate tax.
In accordance with Article 51 of the Corporate Tax Law, the Agency adopted Ministerial Decision No. 43 dated the year 2023 on exemption from tax registration for the purposes of the Corporate Tax Law.
According to the new rules, the company is exempt from taxation if the amount of taxable income in the current and previous tax periods did not exceed 3 million dirhams (AED).
The specified income limit is applied for a certain period: from 01.06.2023 to 31.12.2026.
State organizations, state-controlled organizations, mining enterprises and enterprises not engaged in the extraction of natural resources that meet the necessary conditions in accordance with the Corporate Tax Law are exempt from paying tax.
In addition, non-resident persons who receive income only from the UAE and do not have a permanent representative office in the UAE are exempt from registration to pay corporate tax.
This decision is in line with international best practices, since entities exempt from corporate tax, such as the federal government, government departments and authorities of the UAE, other government agencies and other categories mentioned above, are not subject to tax registration, as they are not taxed.
As long as these organizations continue to comply with the exemption conditions specified in the relevant articles of the Law, they do not need to register in the Federal Tax Authority.
The Ministry added that all resolutions of the Cabinet of Ministers and ministerial decisions adopted in connection with the Corporate Tax Law are available on the website of the Ministry of Finance.
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