Snapshot-

The Federal Tax Authority (“FTA”) of the UAE has issued several Cabinet and Ministerial decisions following the publication of the UAE Corporate Tax (“CT”) Law. These decisions are aimed at providing further guidance and clarification with respect to certain provisions of the CT Law. In this issue, we have summarized the key decisions that are of more relevance to UAE businesses.

Decision No. 6 of 2023

Tax deregistration – 07 April 2023

• Natural Person - Within 3 months of business cessation.
• Juridical Person - Within 3 months after cessation, non-existence, dissolution, and liquidation of business.

Decision No. 7 of 2023

Exemption from CT Law – 07 April 2023

• Entities specified under Article 4(1)(e),(f),(g),(h), and (i) of UAE CT law must obtain a CT registration.
• Exemption application to be submitted post registration - within 60 days from the end of the tax period.
• Subject to an annual declaration filing to confirm fulfilment of exemption conditions.

Decision No. 37 of 2023

Qualifying public benefit entities – 07 April 2023

• Provides a list of entities considered as qualifying public benefit entities.
• Donations, grants, or gifts paid to these entities are deductible.

Decision No. 83 of 2023

Permanent establishment (“PE”) exclusions on presence of natural persons - 10 April 2023

• Exceptional circumstances of a public or private nature.
• No intention to remain in the UAE after exceptional circumstances end.
• No PE in the UAE prior to such circumstances.
• Non-consideration of PE or source of income in the UAE.

Decision No. 68 of 2023

Single taxable person treatment of Government entity - 07 April 2023

• Federal/Local Government entities’ businesses can be treated as a single taxable person.
• Application to be filed by a government representative.
• Business conducted under a recognized license.
• Local government’s businesses conducted within the same Emirate.

How can Crowe help?

• Analyzing the impact of Cabinet decisions and helping clients navigate any changes that may affect their business planning, including entity formation, financial planning, and business structure.
• Assessing the feasibility of leveraging on any available opportunities to optimize cost and minimize administrative burdens for tax compliance in response to the latest published Cabinet decisions.