UAE announces 3 new decisions relating to corporate tax

April 2023 (Khaleej Times)

The UAE’s Ministry of Finance has announced three new decisions relating to corporate tax. The ministerial decisions clarify the conditions for the exemption of private regulated pensions and social security funds; the basis of preparing financial statements and mechanisms for consolidating them within a tax group; and determining the conditions for claiming participation exemption.

Younis Haji Al Khouri, undersecretary of the ministry, said the decisions aim to enhance the flexibility of the UAE’s corporate tax regime and ensure a supportive business environment for all sectors.

“The decisions cover several important aspects related to private regulated pensions and social security funds which are normally exempted from corporate tax in other countries. Designating IFRS as the applicable accounting standards and further simplifying accounting processes for SMEs reflects the Ministry of Finance’s commitment to impose a minimal compliance burden for businesses … In addition, the participation exemption will prevent double corporate tax on the profits of one entity and eliminate international double taxation.”