On Monday, April 10, 2023, at 10:54 am, the Ministry of Finance issued Ministerial Resolution No. (43) of 2023. This resolution concerns the exemption from tax registration for the corporate and business tax (corporate tax law) under the Federal Decree-Law No. (47) of 2022. The ministerial decision was introduced in light of Article No. (51) of the Companies Tax Law, which requires taxable groups to register for corporate tax with the Federal Tax Authority unless specified otherwise. The decision outlines the categories of exemption from registration for corporate tax. These categories include government and government-affiliated entities, extractive and natural resource businesses meeting specific corporate tax law conditions, and non-resident persons earning income only in the state without a permanent establishment. This exception aligns with international best practices and exempts entities that are not subject to tax, such as federal and UAE governments, departments, authorities, public institutions, and the other categories referenced above. As long as these entities continue to match the prescribed exemption conditions, there is no need to register them with the Federal Tax Authority. This information was attributed to Dina Omar and Ramy Samih.
Monday, April 10, 2023 – 10:54 am
ABU DHABI, 10th April, 2020 (WAM) — The Ministry of Finance issued Ministerial Resolution No. (43) of 2023 regarding the exemption from tax registration for the purposes of Federal Decree-Law No. (47) of 2022 regarding corporate and business tax (corporate tax law).
The ministerial decision was issued regarding the exemption from tax registration in accordance with the provisions of Article No. (51) of the Companies Tax Law, which requires taxable groups to register for corporate tax with the Federal Tax Authority, except in certain cases.
The ministerial decision regarding exemption from tax registration determines the categories that will be excluded from registration for corporate tax.
Certain categories exempt from corporate tax such as government and government-affiliated entities, as well as extractive businesses and non-extractive natural resource businesses, who meet the conditions specified under the corporate tax law, have been excluded from tax registration for the purposes of the corporate tax law.
A non-resident person was also excluded from registration for corporate tax if he only earns income originating in the state and does not have a permanent establishment in the state.
The exception stipulated in the decision comes in line with international best practices, as it excludes categories that are exempt from tax registration, such as the federal government, UAE governments, departments, authorities, and other public institutions, and the other categories referred to above, because they are not subject to tax. Therefore, there is no need to register these entities with the Federal Tax Authority as long as they continue to meet Exemption conditions contained in the relevant articles of the Decree-Law.
Dina Omar / Ramy Samih
In conclusion, the Ministry of Finance’s issuance of Ministerial Resolution No. (43) of 2023 regarding the exemption from tax registration for certain categories under the Federal Decree-Law No. (47) of 2022 regarding corporate and business tax is a significant step towards streamlining the tax registration process. With this move, government and government-affiliated entities, extractive and non-extractive natural resource businesses, and non-residents earning income solely from the state are excluded from registering for corporate tax with the Federal Tax Authority as long as they meet the conditions specified under the relevant articles of the Decree-Law. By aligning with international best practices, this exemption is expected to benefit businesses in the UAE while promoting economic growth in the country.
