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27 February 2024

Ministry of Finance issues decision on exception from registration for corporate tax purposes

Published
By WAM

The Ministry of Finance has issued Ministerial Decision No. 43 of 2023 on the exception from tax registration for the purposes of Federal Decree-Law No. 47 of 2022 on the Taxation of Corporations and Businesses (Corporate Tax Law).

The decision is issued in accordance with Article 51 of the Corporate Tax Law which requires taxable persons to register for Corporate Tax with the Federal Tax Authority, except in certain circumstances.

The Ministerial Decision on the Exception from Tax Registration sets out who would be excluded from registering for Corporate Tax.

Certain exempt include government entities, government-controlled entities, extractive businesses and non-extractive natural resource businesses that meet the necessary conditions under the Corporate Tax Law and are not required to register for Corporate Tax purposes.

A non-resident person will also not be required to register for Corporate Tax if they only earn UAE-sourced income and do not have a Permanent Establishment in the UAE.

The exception stipulated in the decision is in line with international best practices, whereby persons exempted from Corporate Tax such as the federal government, UAE government departments and authorities, other public institutions and other categories referred to above are excepted from tax registration because they are not subject to tax.

Therefore, there is no need for these entities to register with the Federal Tax Authority as long as they continue to meet the exemption conditions, noted in the relevant articles of the Decree-Law.