UAE Corporate Tax- Taxable Rates, Persons, Exempt Persons & Free Zone Persons

On December 9, 2022, the UAE Ministry of Finance (MoF) issued Federal Decree-Law No. 47 of 2022 on the Taxation of Corporations and Businesses, commonly referred to as the Corporate Tax Law. This new law introduces a corporate tax regime in the UAE, and it's essential to stay informed about the categories of Taxable Persons, Exempt Persons, Free Zone Persons, and the applicable taxable rates. Follow this blog to remain updated on the latest information regarding the new corporate tax regime. The line emphasizes the importance of keeping up-to-date on the latest developments related to the Corporate Tax Law in the UAE.

• Juridical person that is established, recognized, or incorporated under the relevant laws of the State, including Free Zone entities, is classified as a Resident Person. In simpler terms, any legal entity that is created or acknowledged by the State's laws, including Free Zone organizations, falls under the Resident Person category.
• The line implies that a legal entity established or recognized under the relevant laws of a foreign country and effectively managed and controlled within the State is classified as a Resident Person. In simpler terms, any legal entity formed or acknowledged under foreign laws, but managed and controlled within the State, falls under the category of Resident Person.
• This line suggests that any individual who conducts or operates a business activity within the State falls under the Resident Person category. In simpler terms, any natural person who engages in any business activity within the State is classified as a Resident Person.
• This line indicates that any other individual or entity can be classified as a Resident Person based on a decision by the Cabinet, issued at the suggestion of the Minister. In simpler terms, any person or entity that does not fall under the above-mentioned categories can be designated as a Resident Person through a decision made by the Cabinet upon the Minister's recommendation.

• This line suggests that corporations and other legal entities that are based in the UAE or effectively managed and controlled there are subject to the new corporate tax regime. In simpler terms, any corporations or legal entities that have their base or effective control within the UAE are liable to comply with the new corporate tax laws.
• This line refers to Free Zone persons who earn income that does not meet the requirements to be considered qualifying income under the new corporate tax regime. In other words, Free Zone persons whose income falls outside the defined parameters for qualifying income are subject to the regular corporate tax rates.
• This line refers to individuals who engage in commercial activities in the UAE. In other words, it pertains to natural persons who operate a business or conduct business activities within the UAE.
• This statement pertains to people who participate in trade or commerce within the UAE. To put it differently, it concerns individuals who conduct business operations or activities in the UAE. The reference is to natural persons who are involved in running a business or engaging in business activities within the UAE.

• This line refers to the various bodies and organizations belonging to the Federal and Emirate Governments in the UAE, including their departments, authorities, and other public institutions.
• This statement refers to companies that are fully owned by the government and engaged in a specific activity that is required by law. Such companies must be listed in a decision issued by the Cabinet to qualify for an exemption from corporate tax.
• This refers to companies involved in the extraction of natural resources in the UAE, as well as other activities that are associated with it. These companies will be subject to taxation at the Emirate level once they have satisfied certain requirements.
• This line refers to entities that provide public benefits and are listed in a Cabinet Decision. In other words, these are organizations that operate for the greater good of society and have been recognized and approved by the Cabinet for tax exemptions.
• This line refers to Investment Funds that fulfill specific requirements and are eligible for exemption from Corporate Tax under the UAE's Corporate Tax Law. The specific conditions and criteria for exemption will be determined by the regulatory authorities.
• Entities that operate public or private pension or social security funds may be exempt from corporate tax if they meet specific requirements set forth in the Corporate Tax Law.
• This line refers to Juridical persons in the UAE that are fully owned and controlled by specific entities exempted from corporate tax, provided that they meet specific conditions.

•  Maintains sufficient substance in the UAE
•  Obtains qualifying income (to be specified through a Ministerial Decision).
•  Meets transfer pricing requirements.
•  Meets any other conditions imposed by a Ministerial Decision.