The UAE Ministry of Finance (MoF) has announced amendments to key Ministerial Decisions regarding corporate tax regulations, effective for tax periods starting January 1, 2025. These updates aim to enhance compliance processes, provide administrative relief, and bolster the UAE’s reputation as a global business hub.
Highlights of the Revisions:
Updated Ministerial Decisions
- Ministerial Decision No. (301) of 2024: Addresses Tax Groups under Federal Decree-Law No. 47 of 2022, introducing administrative simplifications.
- Ministerial Decision No. (302) of 2024: Provides further clarity on the Participation Exemption and Foreign Permanent Establishment Exemption.
Key Changes
- Simplified Compliance for Resident Persons: Streamlined processes for foreign juridical persons classified as UAE residents and entities managed outside the UAE.
- Tax Group Income Clarifications: Rules to calculate taxable income based on the arm’s length principle are eased when foreign tax credits are available, reducing compliance complexity.
- Participation Exemption Enhancements:
- Double Taxation Prevention: Ensures income from qualifying ownership transfers under Group or Business Restructuring Relief is exempt from double taxation.
- Asset Test Adjustment: Applies solely to related parties, simplifying fund investments.
- Foreign Permanent Establishments: Clarifies exemption eligibility when profits offset tax losses.
Key Remarks
Younis Haji AlKhoori, under-secretary of the Ministry of Finance, emphasized that these changes underscore the UAE’s commitment to fostering a business-friendly tax environment.
For detailed information, visit the Ministry of Finance website.
