Will UAE Corporate Tax apply to Charitable Institutions or Public Benefit Organisations?
The UAE actively promotes corporate social responsibility, volunteering activities, and community service, and is the home of many philanthropic and public benefit organizations. These organizations play an important role by taking a shared responsibility with the Government for the promotion of social or public welfare, or communal or group interests.
To support organizations formed for carrying out social, cultural, religious, charitable, or other public benefit activities, they can apply to the Ministry of Finance to be exempt from UAE Corporate Tax. If the application is approved, the organization will be listed in a Cabinet Decision to be issued at the request of the Minister of Finance.
Whether an organization qualifies for a Corporate Tax exemption is at the discretion of the Ministry of Finance. However, no exemption from UAE Corporate Tax will be available to organizations that undertake commercial activities that are not directly related to their stated purpose, or whose income and donations are or may be used for the personal gain of persons associated with the organization (e.g., the founders and fiduciaries).
Approved charities and public benefit organizations will need to comply with periodic information reporting obligations throughout their existence.
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.
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