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The Ministry of Finance in the UAE issued, on Wednesday, Ministerial Resolution No. (105) of 2023, which specifies the conditions that allow a person to continue to be considered or cease to be considered exempt from corporate tax, which contributes to clarifying the mechanism for applying the law and promoting business growth in the country in various sectors.
The decision clarifies the conditions that must be met for businesses to remain eligible for exemption from corporate tax in the event that they do not meet the relevant exemption conditions in the decree, in specific cases such as companies under liquidation or closure, with the condition that they submit a notification to the Federal Tax Authority within (20) twenty working days from the date Commencement of liquidation or closing procedures.
Younis Haji Al-Khoury, Undersecretary of the Ministry of Finance, confirmed that the decision guarantees the existence of a fair and effective tax system that promotes business growth in the country, stating, “The new ministerial decision clarifies the conditions under which a person can be considered or ceased to be considered exempt from a different date and other cases that allow him to continue to be considered as an exempt person.” Such as the existence of an emergency or exceptional circumstance that is beyond the control of the exempt person and could not have been reasonably foreseen or avoided.
In these cases, the exempted person must submit an application to the Federal Tax Authority within (20) twenty working days from the date of non-fulfillment of the exemption conditions, and he must rectify the matter and correct it within (20) twenty working days from the date of submitting the application, and the period for correcting non-compliance can be extended Fulfilling the conditions for an additional twenty (20) working days in case the reason is beyond the person’s will.
The ministerial decision also clarifies that if it is concluded that one of the main purposes of stopping the exemption is to intentionally obtain an advantage related to corporate tax, which is considered an abuse of the tax system, then the person will cease to be considered exempt from the day he no longer meets the conditions for the exemption.
