Business Restructuring Relief UAE: Summary & Criteria

UAE CT: Business Restructuring Relief – Key Points and Eligibility

The UAE launched its corporate tax (CT) regime to shape a fair, modern business world. Companies must now follow new rules for tax, registration, and reporting. Mubarak Al Ketbi (MAK) Auditing explains the main points about business restructuring relief—what it covers, how to qualify, and how your company can benefit from the FTA’s guidance.

What Does Business Restructuring Relief Mean?

Business restructuring relief lets companies make certain big changes—like mergers, splits, or transferring whole parts of a business—without triggering extra tax. The FTA made these rules to stop tax bills from blocking business deals when ownership doesn’t really change.

• Normally, selling a business part or merging could cause tax on profits or losses.
• But with this relief, companies can make these moves tax-neutral if they meet all criteria.

Which Transactions Get Business Restructuring Relief?

The main types of deals that can use this relief include:

• Transferring a whole business or an independent part from one taxable person to another taxable person.
• Transferring a business from one or more taxable persons to another, if the original company (transferor) stops existing after the move.

These cover most real-world mergers, demergers, and certain restructures.

What Are the Key Conditions for Relief?

To get business restructuring relief, your deal must fit every rule:

• The transfer follows all UAE law and regulations.
• Both the transferor and transferee are resident persons or non-resident persons with a permanent establishment in UAE.
• Neither company is an exempt person or qualifying freezone person during the relevant tax period.
• Both the transferor and transferee have their financial year ending on the same date (not always the same tax period, but the year-end date must match).
• Both companies use the same accounting standards.
• The transfer must happen for real business reasons—not just to cut taxes.

Examples of Covered Transactions

Business restructuring relief applies to these deals:

• Turning a sole proprietorship into an incorporated company.
• An unincorporated partnership applies to FTA to be taxed as its own person.
• Legal demergers where a business splits into new parts.
• Merging with a subsidiary business under the law.
• Transfers where the whole business goes to a new owner via legal merger or demerger.

Examples of Transactions Not Covered

Relief does not cover:

• Moving assets/liabilities to another company due to liquidation.
• A subsidiary merging with its parent where the subsidiary’s shares are cancelled.
• Transfers to a wholly owned subsidiary or parent if no new shares are issued.

Practical Steps to Use Business Restructuring Relief

You should always:

• Check if your transaction fits the rules.
• Get legal and tax advice before moving business parts.
• Make sure both companies match accounting standards and year-end dates.
• Keep documents about why you did the transfer and how you followed every rule.
• File the right paperwork with FTA when you use the relief.

What Can Help? – Mubarak Al Ketbi (MAK) Auditing

When your company wants to use business restructuring relief, you need a partner who knows every rule. Mubarak Al Ketbi (MAK) Auditing will:

• Check your deal for relief eligibility,
• Guide your team with every step,
• File all forms and keep records for FTA,
• Train your staff to handle tax reporting,
• Offer clear advice—so you “get all your ducks in a row.”

For more information:

• Visit our office: Saraya Avenue Building – Office M-06, Block/A, Al Garhoud – Dubai – United Arab Emirates
• Contact/WhatsApp: +971 50 276 2132