Ministerial Decision No 7 of 2023 on Provisions of Exemption from Corporate Tax
Ministry of Finance has issued Ministerial Decision No, 7 of 2023 on Provisions of Exemption from Corporate Tax for the purposes of the Federal Decree Law No. 47 of 2022 on Taxation of Corporations and Businesses (“CT law”).
Below are the key highlights of the decision-
1.Application for Corporate Tax Registration :
1. A Qualifying Public Benefit Entity shall apply for Tax Registration and obtain a Tax Registration Number from 1 October 2023 onwards.
2. However, the following persons shall apply for Tax Registration and obtain a Tax Registration Number from 1 June 2024 onwards.
- A Qualifying Investment Fund
- A public pension or social security fund, or a private pension or social security fund that is subjected to regulatory competent authority in the UAE.
- A juridical person incorporated in the UAE that is wholly owned and controlled by government entity, government-controlled entity, qualifying investment fund, a public pension or social security fund, or a private pension or social security fund that is subjected to regulatory competent authority in the UAE.
2.Application for Exemption from Corporate Tax:
- If the Authority approves the application for Tax Registration of the Persons for whom the date of application for CT registration commences from 1 June 2023 onwards ,such persons shall be entitled to submit an application for exemption from Corporate Tax.
3. Timeline to Apply for Exemption and its Effective Date:
1. A public pension or social security fund, or a private pension or social security fund that is subjected to regulatory competent authority in the UAE and a juridical person incorporated in the UAE that is wholly owned and controlled by an Exempt Person are required to apply for exemption within 60 business days from the end of the Tax Period in which the Person met the conditions for exemption.
2. If the Authority approves the application for exemption, the exemption shall be effective from the start of the Tax Period specified in the application.
3. The Authority may determine an alternative date for the effective date of the exemption where any of the following scenarios takes place:
- If the Tax Period specified in the registration form is incorrect, the exemption shall be effective from the correct date.
- If the applicant is acquired during a Tax Period by Government Entity or Government Controlled Entity, Qualifying Investment Fund, a public pension or social security fund, or a private pension or social security fund that is subjected to regulatory competent authority in the UAE.
- If the Tax Period included in the application for exemption is incorrect and the Authority receives sufficient supporting information to demonstrate that the conditions have been met within the later Tax Period, the exemption shall be effective after the date of fulfilment of the conditions.