UAE CT Update: Clarification on Corporate Tax registration and exemption for certain entities

The Federal Tax Authority (‘FTA’) has issued Decision No. 7 of 2023 on the timelines to apply for corporate tax registration and to file an application for corporate tax exemption by certain categories of exempt entities as specified under Article 4 of the Federal Decree Law No 47 of 2022. The aforesaid Decision shall be published in the Official Gazette and shall be effective from 1 June 2023.

Corporate Tax Registration

Sr. No.	Type of exempt entity	Timeline for application for Tax Registration and obtaining Tax Registration No.
1	Qualifying Public Benefit Entity	1 October 2023
2	Qualifying Investment Fund	1 June 2024
3	Public/private Pension/ social security fund
4	Juridical person incorporated in State that is wholly owned and controlled by an Exempt Person
5	Any other exempt person as determined in a decision issued by the Cabinet

 

Post the tax authority approves the application for Tax Registration for Persons covered in categories 2 to 5 above, the Persons may file an application for exemption from the levy of Corporate Tax, subject to satisfaction of conditions of the exemption.

The FTA may request the aforesaid Exempt person(s) to file an annual declaration confirming that it fulfills the exemption conditions.

Timeline to apply for corporate tax exemption and its effective date

The persons included in categories 2 to 4 tabulated above, shall apply for an exemption within 60 business days from the end of the Tax Period in which the Person met the conditions for exemption.

The effective date of the exemption will be the start of the Tax period specified in the application, once the same is approved by the FTA. The FTA has been empowered to determine an alternative effective date of the exemption instead of the start of the tax period in a few scenarios mentioned in the decision.

Key Highlights

The timelines provided are for both i.e. filing an application for tax registration and obtaining a tax registration number. Accordingly, the entities covered above would need to plan timely, filing of the application and obtaining the tax registration number by or before the dates mentioned in the decision since there may be a gap between the date of filing of the application and the date on which tax registration number is issued.

Also Check:- Corporate Tax in UAE