If a set of requirements related to the purpose of incorporation and the uses of "income" and assets are met

521 Public Benefit Entities Eligible for Exemption from "Corporate Tax"

Corporate tax is 9% on taxable income exceeding AED 375k. Archival

Cabinet Resolution No. (37) of 2023 specified a list of 521 public benefit entities eligible to benefit from Article No. (9) of Federal Law by Decree No. (47) of 2022, regarding corporate and business tax, which is concerned with exempting these entities from paying tax.

Exemption requirements

Article (9) of the aforementioned decree stipulates that the qualified public benefit entity shall be exempted from corporate tax if a set of conditions are met, including that its establishment and operation must be for religious, charitable, scientific, artistic, cultural, sports, educational, health, environmental, humanitarian, animal protection or other similar purposes.

The requirements included that the qualified public benefit entity shall act as a professional institution, chamber of commerce, or similar entity exclusively to promote social welfare or the public interest, and shall not conduct business or business activities, except for activities that relate to or are directly aimed at achieving the purposes for which it was established.

Income Usage

Article (9) stipulates that the income or assets of the public benefit entity shall be used exclusively to serve the purpose for which it was established, or to pay any necessary and reasonable expenses incurred for related purposes, and that no part of the entity's income or assets shall be paid or otherwise made available for the personal benefit of any shareholder, member, trustee, founder, or trustee thereof, who is not in itself another qualified public benefit entity, government entity, or affiliate to the government, and any other conditions determined by a decision issued by the Council of Ministers.

Registration in the system

Eligible public benefit entities must register in the corporate tax system with the Federal Tax Authority and obtain a tax registration number for corporate tax purposes.

Edit the list

The decision stipulates that the Council of Ministers may amend the list of qualified public benefit entities, based on a proposal from the Minister to update, add, or delete any entities, and the entity listed in the Cabinet decision must send a notification of any changes that may affect its continuity in meeting the conditions stipulated in the resolution and the Corporate Tax Law.

The Corporate and Business Tax Law comes into effect from its first fiscal year, starting from or after June 2023, 9, and is 375% on taxable income exceeding AED 102,<> ($<>,<>).