UAE – Mubasher: The UAE Ministry of Finance announced that entities existing and operating for the wider public benefit will be eligible for tax exemption under the Corporate Tax Law, according to a press release.

The UAE Cabinet new implementing decision relating to qualifying public benefit entities will apply to those established for the welfare of the public and society and focused on activities that contribute to the fabric of the UAE.

Furthermore, the entities eligible for the exemption usually include religious, charitable, scientific, educational, or cultural value, among others. This step should boost public welfare and promote philanthropy, while endorsing community services or corporate and social responsibility.

To be eligible for the corporate tax exemption, the ministry stated: “These entities must meet the conditions under Article (9) of the Corporate Tax Law and they must continue to comply with all relevant federal and local laws and notify the Ministry of Finance of any changes occurring to these entities that impact their status as a Qualifying Public Benefit Entity.”

The entities should also register in the UAE’s Federal Tax Authority and obtain a Tax registration number for Corporate Tax purposes.

The UAE Ministry of Finance further stated the following:

The Cabinet may amend the schedule of Qualifying Public Benefit Entities at the suggestion of the Minister by modifying, adding, or removing entities.

An entity that is listed in the schedule annexed to the decision must make a notification of any change occurring to the entity that impact the entity’s continuity in meeting the conditions set out in this Decision and the Corporate Tax Law.

Various reporting obligations apply to Qualifying Public Benefit Entities, principally to check that they continue to meet the criteria for approval.

This Cabinet Decision also provides further certainty and transparency for taxpayers in relation to their deductible expenditure under Article 33 of the Corporate Tax Law, as donations and gifts will be allowed as deductible expenditure for Corporate Tax purposes if they are made to a Qualifying Public Benefit Entity listed in the Cabinet Decision.