UAE CT Update: Ministerial Decision on Entities being exempt from obtaining Corporate Tax Registration

The Ministry of Finance has issued Ministerial Decision No. 43 of 2023 on Exception from Corporate Tax Registration for the purposes of Federal Decree-Law No. 47 of 2022 on the “Taxation of Corporations and Businesses” (the “Corporate Tax Law”). This decision has to be read with Article 4 of the Corporate Tax Law.

Who is exempt from Corporate Tax Registration?

The following Persons who are categorized under the list of persons who are exempt from the levy of corporate tax shall not register for Corporate Tax with the Federal Tax Authority (FTA):

1. A Government Entity;
2. A Government Controlled Entity;
3. A Person engaged in an Extractive Business that meets the conditions prescribed in the Corporate Tax Law;
4. A Person engaged in a Non-Extractive Natural Resource Business that meets the conditions prescribed in the Corporate Tax Law;
5. A Non-Resident Person that derives only State Sourced Income and that does not have a Permanent Establishment in the UAE according to the provisions of the Corporate Tax Law.

The decision, also states that persons listed under item (A)-(D) above shall have to register if they become taxable persons under the provisions of the Corporate Tax Law.

The decision, also states that a Non-Resident person who is deriving State Sourced Income without a Permanent Establishment in UAE shall not be required to register. The matter has to be carefully considered, as it may also imply that such a category of persons may eventually be exempted from the levy of corporate tax and the obligation of filing tax returns in the UAE, given that presently there is no requirement to withhold tax on such State Sourced Income.

For any Corporate Tax, enquiry contact us at- +971  526406240 or Email us at:- uae@mbgcorp.com

Article contributed by:

Corporate Tax team - UAE

MBG Corporate Services

Also Check:- Corporate Tax in UAE