UAE announces major new tax law changes

UAE Ministry of Finance says certain organisations and companies will be exempt from paying mandatory tax

UAE Ministry of Finance says certain organisations and companies will be exempt from paying mandatory tax

The UAE has announced a change to tax laws exempting certain companies from paying a mandatory Corporate Tax fee.

The Ministry of Finance unveiled a new decision by the UAE Cabinet new relating to Qualifying Public Benefit Entities.

It is designed to ensure that companies and organisations operating for the wider public benefit don’t have to pay the tax.

UAE tax law change

Qualifying public benefit entities are established for the welfare of the public and society, focusing on activities which contribute to the fabric of the UAE.

Typically, this focus is  on public welfare, promoting philanthropy, community services or corporate and social responsibility.

This implementing decision is designed to reflect these entities’ important role in the UAE, which often includes organisations with a focus on

  • Religion
  • Charitable
  • Science
  • Education
  • Culture

To be eligible for UAE Corporate Tax exemption, these entities must meet the conditions under Article (9) of the Corporate Tax Law and they must continue to comply with all relevant federal and local laws and notify the Ministry of Finance of any changes occurring to these entities that impact their status as a Qualifying Public Benefit Entity.

The Qualifying Public Benefit Entities should also register in the Federal Tax Authority and obtain a Tax registration number for Corporate Tax purposes.

The Cabinet may amend the schedule of Qualifying Public Benefit Entities at the suggestion of the Minister by modifying, adding, or removing entities.

An entity that is listed in the schedule annexed to the decision must make a notification of any change occurring to the entity that impact the entity’s continuity in meeting the conditions set out in this Decision and the Corporate Tax Law.

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

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