Summary of updates on Corporate Tax – UAE

 Summary of the following five recent Ministerial / FTA Decisions on UAE Corporate Tax:

1. Ministerial Decision No. 83 of 2023;
2. Ministerial Decision No. 82 of 2023;
3. FTA Decision No. 5 of 2023;
4. FTA Decision No. 6 of 2023;
5. FTA Decision No. 7 of 2023.

 

Sr. No.	Decision No.	Particulars	Summary
1.	Ministerial Decision No. 83 of 2023	Determination of the Conditions under which the Presence of a Natural Person in the State would not Create a Permanent Establishment for a Non-Resident Person	For the purpose of Article 14(7)(a) of the Corporate Tax Law, the presence of a natural person where all the conditions mentioned are satisfied, shall be considered a ‘Consequence of a Temporary and Exceptional situation’: a.    Presence is a consequence of exceptional circumstances of a public or private nature. b.    Exceptional circumstances cannot be reasonably predicted by the natural person / Non-resident person. c.    The natural person did not express any intention to remain in the state when the exceptional circumstances end. d.    The Non-resident Person does not have a Permanent Establishment (P.E.) in the State before the occurrence of the exceptional circumstances. e.    The Non-Resident Person did not consider that the natural person is creating a P.E. or deriving income in the State as per the tax legislation of other jurisdiction.
2.	Ministerial Decision No. 82 of 2023	Determination of Categories of Taxable Persons Required to Prepare and Maintain Audited Financial Statements	Following categories shall prepare and maintain audited financial statements: i.                     Taxable Person deriving Fifty Million AED during the relevant Tax Period. ii.                   A Qualifying Free Zone Person.
3.	FTA Decision No. 7 of 2023	Provision for Exemption from Corporate Tax	i.      Article 4(1)(e) of Corporate Tax – Qualifying Public Benefit Entity – shall apply and obtain Tax Registration as of 01.10.2023. ii.     Article 4(1)(f)/(g)/(h)/(i) – Qualifying Investment Fund / Public Pension Fund or Social Security Fund etc.- shall apply and obtain Tax Registration as of 01.06.2024. iii.   If the Authority approves the application for Tax Registration – persons included in Article 4(1)(f)/(g)/(h)/(i) may be entitled to submit an application for exemption from Corporate Tax. iv.   The Authority may request the Exempt Person to file an annual declaration confirming that it still fulfills the exemption conditions. v.     Article 4(1)(f)/(g)/(h)/(i) – Shall apply for exemption within 60 business days from the end of the Tax Period in which the Person met the conditions for exemption.

			vi.   On approval, the exemption shall be effective from the start of Tax Period. vii. The Authority may determine date for the effective date of exemption in certain scenarios.
4.	FTA Decision No. 6 of 2023	Tax Deregistration Timeline	Timelines for Tax Deregistration: 1.       Natural Persons – Within 3 months of cessation of Business or Business Activity. 2.       Juridical Person – Within 3 months of date the entity ceases to exist, cessation of business, dissolution, liquidation or otherwise.
5.	FTA Decision No. 5 of 2023	Conditions for Change in Tax Period	i.      Change in Tax is for any one of following reasons: a.       Liquidation of Taxable Person. b.       Aligning of a Resident Taxable Persons Financial Year (F. Y.) with that of another Resident Taxable Person for forming or joining Tax Group OR aligning a Taxable Persons F. Y. with that of its domestic/foreign head office, subsidiary, parent or ultimate parent, for purpose of financial reporting, to benefit from a tax relief under the Law or under legislation of a foreign jurisdiction. c.       Valid commercial, economic of legal reason. ii.    Taxable Person has not filed Tax Return for the relevant Tax Period. iii.   Application is in respect of either extending the current tax period to a maximum of 18 months; or shorten the next tax period to be between 6-12 months. iv.   Application to be made before the lapse of 6 months from the end of the original Tax Period. v.     Application to shorten a Tax Period shall not be in respect of a prior or current Tax Period.