A new resolution from the UAE Ministry of Finance (MoF) clarifies company tax exemption standards and encourages growth across numerous industries.

The Ministerial Resolution No. (105) of 2023 specifies corporation tax exemption requirements. Undersecretary MoF Younis Haji Al Khoori said the resolution aims to make taxes clear and efficient.

He said the conditions include unexpected events or circumstances beyond the individual or corporation seeking exemption.

Even if they don’t meet the corporation tax law’s requirements, enterprises must meet the resolution’s requirements to be exempt from corporate tax.

It also requires enterprises liquidating or closing to notify the Federal Tax Authority (FTA) within 20 working days.

An emergency-related failure to meet exemption criteria must be reported to the FTA within 20 working days.

They must fix the emergency within 20 working days after applying. An extension of 20 working days may be allowed for uncontrollable circumstances.

The resolution further warns that tax evasion will result in loss of exemption status.

Tax-Exempt Companies
MoF produced a list of enterprises exempt from corporation tax last month. The corporate tax law-compliant list comprised government organisations, government-controlled corporations, and extractive/non-extractive natural resource businesses.

If their only income was from UAE, non-residents and non-organizations were not obliged to register for corporation tax.

From June 2023, MoF will reduce corporation taxes for small and micro firms, start-ups, and freelancers.