UAE's Ministry of Finance details which businesses are not required to register for Corporate Tax

A new decision from the UAE's Ministry of Finance (MOF) on the taxation of corporations and businesses details which companies are exempt from registering for corporate tax.

The decision is made in accordance with the Corporate Tax Law, which, barring specific situations, requires taxable persons to register for corporate tax with the Federal Tax Authority.

Governmental organizations, companies under the jurisdiction of the government, firms engaged in extractive industries, as well as non-extractive natural resource businesses, are free from the requirement to register for corporate tax reasons.

If a non-resident individual merely receives revenue from the UAE and does not have a Permanent Establishment there, they are also exempt from corporate tax registration requirements.

The decision's exception, which states that those who are exempt from corporate tax, such as the federal government, UAE government departments and authorities, other public institutions, and other categories mentioned above, are not required to register for taxes because they are not liable for them, is consistent with international best practises.

As long as they continue to satisfy the exemption requirements outlined in the applicable Decree-Law articles, these entities do not need to register with the Federal Tax Authority.

The MOF announced relief for startups, small and micro companies, and freelancers on Thursday, April 6. This corporation tax cut will take effect on June 1, 2023.

The Small Business Relief project is designed to promote start-ups and other small enterprises by lowering their corporation tax burden and compliance costs, and according to Ministerial Decision No. 73 of 2023, businesses and individuals with revenues of Dh3 million or less are eligible to take advantage of it.

The UAE government declared last year that it would impose a 9% tax on businesses' revenues over Dh375,000.