• Cabinet Decision No. (37) of 2023 Regarding the Qualifying Public Benefit Entities for the Purposes of Federal Decree-Law No. 47 of 2022 on the Taxation of Corporations and Businesses.
• Entities which contribute to the welfare of the public and society in the UAE can qualify for Corporate Tax exemption if they meet certain criteria.
The Ministry of Finance 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.
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 focuses 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 religious, charitable, scientific, educational, or cultural value, among others.
To be eligible for CT 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.
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.
For more information relating to Corporate Tax, please refer to the Ministry of Finance's website: www.mof.gov.ae.
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