The UAE’s Ministry of Finance has introduced a new Cabinet Decision related to the Corporate Tax Law, aimed at making sure that Qualifying Public Benefit Entities (QPBEs) are eligible for tax exemption. The decision is meant to ensure that entities created and operating for the public good are eligible for tax benefits.
A QPBE, defined in the CT Law, is an entity listed in a Cabinet decision and meeting Article 9 conditions. It is considered an Exempt Person for UAE CT purposes under Article 4 and Article 9 conditions.
This focuses on public welfare, promoting philanthropy, community services, or corporate and social responsibility. This implementation decision is designed to reflect these entities’ important role in the UAE, which often includes religious, charitable, scientific, educational, or cultural values, among others.
The Cabinet Decision lists QPBEs as defined under the CT Law, and can be modified by Cabinet based on Finance Minister’s suggestions. QPBEs must provide the necessary documentation to confirm their eligibility and may be subject to review to ensure continued compliance with Article 9 of the CT Law.
Entities must inform the tax authority of any changes affecting their QPBE status within 20 days. QPBEs in Cabinet Decision No. (37) of 2023 are exempt from UAE CT if they meet Article 9 conditions, but are subject to reporting to ensure ongoing compliance. Further details on registration and reporting are pending. Article 33 of the CT Law allows taxpayers to deduct expenses related to donations, grants, or gifts to QPBEs for UAE CT purposes.