How Does UAE Corporate Tax Apply to Government and Government Owned Companies?

Will UAE Corporate Tax apply to Government and Government Owned Entities?

While the activities of the Government would typically be non-commercial in nature, the Government may conduct commercial activities either by themselves or in association with third parties. Any business activity carried out directly by the Government under a trade licence will be within the scope of the UAE Corporate Tax regime.  

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Wholly Government-owned UAE companies that carry out a sovereign or mandated activity are essentially an extension of the Government, with the relevant activity segregated from those of the Government for management and accountability purposes. Accordingly, these companies will be outside the scope of UAE Corporate Tax insofar of their sovereign or mandated activity.

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The UAE Corporate Tax regime will allow UAE subsidiaries of these Government-owned companies that undertake part or whole of the sovereign or mandated activity or ancillary activities to apply for an exemption from UAE Corporate Tax.

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Note: The information in this article is meant to provide an initial introduction to the proposed UAE Corporate Tax regime and not be used for individual or business decisions as it does not represent the final legislation by the Government. More information o the UAE Corporate Tax regime will be made available in due course.