Who can get a non-extractive resource business exemption in UAE?

Any business working with natural resources, but not removing them from the ground, can get the exemption if they meet all the rules.

What counts as ancillary business income?

Income from activities that support the main resource business, like storage or transport, is ancillary, if it’s needed and under 5% of total income.

Do I need to pay both local tax and federal corporate tax?

No, if you meet the conditions, you pay only local Emirate tax or royalty, not federal corporate tax.

What happens if I earn income from individuals?

If your business earns from individuals, you might lose your exemption and have to pay the federal corporate tax.

Who can help me apply for the exemption?

Mubarak Al Ketbi (MAK) Auditing can guide your business through every step, so you meet the rules.

Corporate Tax for Non-Extractive Resource Businesses UAE

Corporate Tax Rules for Non-Extractive Natural Resource Businesses in UAE

Understanding Corporate Tax for Non-Extractive Resource Companies

The UAE brought in the Corporate Tax Law with Federal Decree-Law No. 47 of 2022. This tax law started on June 1, 2023. It changed how businesses pay tax in the UAE. All companies must pay tax unless they get special exemptions. Some companies that work with natural resources can be exempt. Mubarak Al Ketbi (MAK) Auditing helps you know if you meet the rules.

What Is a Non-Extractive Natural Resource Business?

A non-extractive natural resource business works with the UAE’s natural resources, but it doesn’t remove the resources from the ground. Instead, these companies process, refine, treat, store, transport, market, or distribute natural resources.

Examples of non-extractive resource businesses:

Oil and gas refineries
Petrochemical plants
Aluminium smelters
Steel mills
Power plants
Mines and quarries
Desalination plants
Water treatment plants
Waste management companies

Exemption Rules for Non-Extractive Natural Resource Businesses

A business can get an exemption from federal corporate tax if it meets these three main rules:

Get a Local License:
The company must have a license from the Emirate’s government to use natural resources.
Pay Local Tax or Royalty:
The business must pay tax, a royalty, or similar fees to the local Emirate government for its activities.
Notify the Ministry:
The business must tell the Ministry of Finance that it meets the rules for the exemption.

If a business does all three, it won’t pay the federal corporate tax for non-extractive resource activities. Mubarak Al Ketbi (MAK) Auditing can guide you in every step, so you stay compliant.

Special Income Rules for Non-Extractive Resource Businesses

The company can only earn money from other businesses, not from normal people who don’t run a business. If a non-extractive resource business sells to someone who isn’t running a business, it might lose its tax exemption.

What Is an Ancillary Business?

An ancillary business is a side activity that helps the main non-extractive natural resource business. These extra activities are only exempt if:

The activity is truly needed for the main business.
Income from the ancillary business is less than 5% of the company’s total income.

Examples of ancillary businesses:

Transportation of natural resources for the main business
Storage for supporting main business operations
Support services to help the main activity

Mubarak Al Ketbi (MAK) Auditing can help you sort out what’s considered ancillary, so you keep your tax benefits.

Rules When Owning More Than One Business

Some people or companies own both a non-extractive resource business and other businesses. Here are the rules:

Income from non-extractive resource activities is taxed by local Emirate law, not federal corporate tax.
Income from other businesses is taxed by the federal corporate tax law.
If the other business only helps the non-extractive resource activity, and it earns less than 5% of the total income, it might be exempt.
If you have another business not related to the main resource activity, it might have to pay the regular corporate tax.

It’s important to:

Keep your business records clear.
Not mix up income from resource activities and other activities.

Important Points for Non-Extractive Resource Businesses

Let’s summarize the main things you should remember:

Always check if you have the right Emirate license.
Make sure you’re paying local tax or royalty.
Only earn from other businesses, not individuals.
Notify the Ministry of Finance if you want the exemption.
Keep income from ancillary activities below 5%.
Keep your records clear and up to date.

How Mubarak Al Ketbi (MAK) Auditing Can Help Your Business

If you want to make sure you follow every rule and don’t lose your exemption, you should let Mubarak Al Ketbi (MAK) Auditing help you. Our team knows the ins and outs of UAE corporate tax law and can walk you through every detail. You won’t have to worry about missing anything because we’re with you every step of the way. When it comes to taxes, we believe “the early bird catches the worm”—and with our help, your business can always stay ahead!