The Ministry of Finance has announced a new decision expanding corporate tax exemptions to include certain foreign entities under specific conditions.
Under Cabinet Decision No. (55) of 2025, some foreign entities wholly owned by exempted organisations—such as UAE government entities, government-controlled entities, qualifying investment funds, and public pension or social security funds—may now qualify for corporate tax exemption.
This move comes under Federal Decree-Law No. (47) of 2022 on the Taxation of Corporations and Businesses.
Equal treatment for entities
Previously, only UAE-incorporated entities were eligible for corporate tax exemptions, even if foreign entities were fully owned by exempt organisations or operated through branches in the UAE.
The updated rule now allows such foreign entities to be exempt, provided they meet the relevant conditions.
Support for investment environment
According to the Ministry, the decision is intended to ensure consistent tax treatment for both local and foreign entities owned by exempted bodies. It also aims to enhance the UAE’s attractiveness for holding companies and supports the country’s goal of maintaining a fair and competitive tax system in line with international standards.
tanvir@dubainewsweek.com
