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UAE Announces Tax Exemption for Certain Organizations

The United Arab Emirates (UAE) government has decided to change the tax law for certain public welfare organizations, which will not be required to pay corporate tax.

The goal is to make sure that these organizations can continue serving the public without being burdened by taxes.

Majorly, these social welfare organizations are involved in religious, charitable, scientific, educational, and cultural activities. The decision is meant to highlight the importance of such organizations and their contributions to the country.

To qualify for the tax exemption, these organizations must meet certain conditions, such as focusing on public welfare, philanthropy, community services, and corporate as well as social responsibility. They also need to follow all relevant laws and inform the Ministry of Finance regarding any changes.

The organizations must register with the Federal Tax Authority (FTA) and follow the rules to ensure that they are eligible for the exemption. The government can change the list of organizations that qualify for the exemption if needed.

The Corporate Tax rates in the UAE are as follows:

  • No tax on an income lower than AED 375,000.
  • A 9% tax on income exceeding AED 375,000.

The UAE government has outlined several types of entities and businesses that are exempt from paying corporate taxes. These include government entities, government-controlled firms, extractive and non-extractive natural resource businesses, public and private pension funds regulated by the government, along with juridical persons completely owned and controlled by exempt entities.

The exemption also covers any other organizations determined by the Cabinet based on the recommendation of the Minister.

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