Exempt Persons and Their Record-keeping in UAE Corporate Tax Law
Who Counts as an Exempt Person Under UAE Corporate Tax Law?
Mubarak Al Ketbi (MAK) Auditing always helps people understand the rules in the UAE. The corporate tax law in the UAE gives special exemption to some people and companies. You should know if you’re exempt before you register for tax.
Here are the main categories of exempt persons under the UAE CT law:
- Any government entity
- Any government-controlled entity
- Anyone who does extractive business and meets Article 7 rules
- Anyone who does non-extractive natural resource business under Article 8
- Any qualifying public benefit entity under Article 9
- Any qualifying investment fund under Article 10
- Any public or private pension or social security fund, if they follow the authority’s rules
- Any company set up in the UAE, fully owned and controlled by exempt persons (like those above), if it does activities only for the benefit of those exempt persons
- Anyone the cabinet declares exempt, if suggested by the minister
If any exempt person doesn’t follow the CT law, they can lose their exempt status.
What Record-keeping Rules Do Exempt Persons Have?
The UAE CT law says that both taxable and exempt persons must keep all required records and documents. They need to keep these for seven years after the end of the tax period that the records relate to.
Important points:
- You must keep your records for seven years starting from the end of the tax period, not the year the record was made.
- For example, if you use the cash basis of accounting, your bills or invoices may show up in a different year from when you pay them. The seven-year clock starts when the tax period in which you paid them ends.
What kind of records do you need?
- Bills and invoices
- Bank statements
- Contracts and agreements
- Payroll records
- Any documents the FTA requests
You must provide your records to the FTA if they ask. They must always be updated, correct, and easy for the FTA to see.
Who Doesn’t Have to Register Under UAE Corporate Tax Law?
The law lists some people and companies who don’t need to register for corporate tax:
- Any government entity
- Any government-controlled entity
- Anyone doing extractive business, if they meet Article 7 rules
- Anyone doing non-extractive natural resource business under Article 8
- Any non-resident person earning only state-sourced income (under Article 13), with no permanent establishment in the UAE
However, if any of these persons ever become taxable, they must register for corporate tax.
If you don’t fall into these categories, you must register.
Steps to Stay Compliant With UAE CT Law
Mubarak Al Ketbi (MAK) Auditing suggests the following:
- Review your business status to see if you’re exempt.
- If you’re exempt, keep all documents for seven years after every tax period.
- Check your exemption regularly and stay updated about rule changes.
- If the FTA asks for your records, provide them quickly.
- If your exempt status changes, register for corporate tax without delay.
Keep in mind:
- The FTA can take away your exempt status if you break the rules.
- Good record-keeping protects you from fines and problems.
How Mubarak Al Ketbi (MAK) Auditing Can Help You
When you work in the UAE, staying compliant with tax rules is the name of the game! Mubarak Al Ketbi (MAK) Auditing helps you keep your exemption, follow every record-keeping rule, and avoid headaches down the road.
We support you with:
- Clear answers about your exempt status
- Easy-to-follow advice on record-keeping
- Fast support if your status changes
- Reminders and updates for every UAE tax law change
- Friendly experts ready to solve your tax questions
For more information:
- Visit our office: Saraya Avenue Building – Office M-06, Block/A, Al Garhoud – Dubai – United Arab Emirates
- Or contact/WhatsApp: +971 50 276 2132
