Public benefit organizations that contribute to the welfare of society are eligible for tax exemption under the UAE’s corporate tax law, the Ministry of Finance said.
Organizations that qualify will be entities that focus on activities such as philanthropy, community services, and corporate social responsibility. They must register with the UAE Federal Tax Authority and obtain a tax registration number for corporate tax purposes.
The exemption emphasizes the significance of public benefit entities, which often include organizations focusing on areas of religion, charity, science, education, and culture.
Entities must comply with all local, state, and federal laws and notify the Ministry of Finance of any changes that may affect their status as Qualifying Public Benefit Entities to be eligible for the tax exemption. Entities are subject to reporting requirements to ensure they continue to meet the criteria for approval.
The cabinet may also change, add or remove entities from the list of qualified entities.
Other exemptions are offered to organizations such as government entities and pension or investment funds. The ministry also issued a tax relief for small businesses with revenues of $816,880 or less to claim tax relief in a tax period when their revenue does not exceed a certain threshold.
The UAE introduced the federal corporate tax with a standard statutory rate of 9%, set to effect for businesses whose financial year starts on or after June this year.
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