The UAE Ministry of Finance has released details of organizations that will be exempted from tax registration for the new corporate tax that will be implemented on June 1, 2023. The decision, issued under Article 51 of the Corporate Tax Law, exempts government entities, government-controlled entities, extractive businesses, non-extractive natural resource businesses, non-resident persons with UAE-sourced income and no permanent establishment in the country, pension or investment funds, public benefit organizations, and existing free zone entities from corporate tax registration. Additionally, the ministry has introduced a Small Business Relief scheme to reduce the corporate tax burden and compliance costs of small businesses.
These measures are part of the UAE’s broader strategy to align with new international standards and will broaden the government’s income base, though negatively impacting the credit profiles of companies operating in the region.