Income or share of income from the extraction and exploitation of natural resources directly earned by the government is outside the scope of the UAE VAT. Similarly royals and other financial taxes raised by the Government from the extraction or production of natural resources by private sector companies will also be outside the scope of the corporate tax. However, companies engaged in the extraction and exploitation of natural resources carry out such activities under long term business agreements with the governments of relevant emirates.
As a result profits earned by such companies are subject to Emirate level taxation. The UAE corporate tax regime respects such long term contracts and permits exemption for the income earned by companies subject to Emirate level taxation.
• Charities and Public Benefit Organizations
Charities and public benefit organizations will be exempt from the UAE corporate tax as they share responsibility with the Government for promoting social or public welfare and communal or group interests. Organizations carrying out social, cultural, religious, charitable or other public benefit activities, can apply to the Ministry of Finance to be exempt from UAE corporate tax. Once approved, the ministry will list the charitable organization in a Cabinet Decision to be issued at the request of the Minister of Finance. However it is at the government’s discretion to determine whether a charitable organization qualifies for the corporate tax exemption in the UAE. The government will not allow an exemption to organizations conducting commercial activities that are not directly related to their stated purpose.
• Social Security and Retirement Pension Funds
Public and regulated private social security and retirement pension funds will be exempted from the purview of the UAE corporate tax regime. However, approved charities and public benefit organizations must comply with periodic information reporting obligations throughout their existence.
• Investment Funds
Regulated investment funds and real estate investment trusts are eligible for UAE corporate tax exemption. They can apply to the Federal Tax Authority (FTA) to be exempt from the corporate tax government. The FTA will approve tax exemption for investment funds that meet its requirements. Spancom Technologies in Dubai can help you to apply for corporate tax exemption
