Last Updated on: 29th June 2023, 02:14 am
UAE Issues Tax Exemption For Public Benefit Organizations
The government of the United Arab Emirates (UAE) has decided to change the tax legislation of certain non-profit organizations that will no longer have to pay corporate tax.
The goal is to ensure that these organizations can continue to serve the public tax-free.
These charities are primarily engaged in religious, charitable, scientific, educational, and cultural activities. The decision aims to highlight the importance of these organizations and their contributions to the country.
To qualify for a tax exemption, these organizations must meet certain conditions, such as a focus on the public good, philanthropy, community service, and corporate social responsibility. You must also comply with all applicable laws and notify the Treasury Department of any changes.
Organizations must register with the Federal Revenue Authority (FCA) and follow the rules to ensure they qualify for the exemption. The government can amend the list of eligible organizations for the exemption if necessary.
The corporate tax rates in the United Arab Emirates are as follows:
- No income tax below AED 375,000.
- An income tax of 9% over AED 375,000.
The UAE government has defined different types of corporations and companies that are exempt from paying corporate income tax. These include government entities, government-controlled entities, resource, and non-extractive resource companies, government-regulated public and private pension funds, and entities wholly owned and controlled by tax-exempt entities.
The exemption also applies to all other organizations designated by the cabinet on the recommendation of the minister.
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