Several listed subsidiaries of the Adani empire, which spans coal, airports, cement and media, collapsed in early trade, with some losing as much as 20%
business2 days ago
UAE companies undergoing liquidation or termination proceedings have been exempt from paying corporate tax, according to a new directive issued by the Ministry of Finance on Wednesday.
The UAE Ministry of Finance has issued Ministerial Decision No (105) of 2023 on determination of conditions under which “a person may continue or cease to be deemed an exempt person,” which helps to clarify the application of the Corporate Tax Law, ensuring a transparent and efficient tax system that promotes business growth in the UAE.
The decision clarifies rules to ensure that businesses remain eligible for a corporate tax exemption if they fail to meet the relevant exemption conditions under certain circumstances.
These include a business undergoing liquidation or termination provided that a notification has been submitted to the Federal Tax Authority (FTA) within 20 business days from the date of the beginning of the liquidation or termination procedure.
Younis Haji Al Khouri, Undersecretary of the Ministry of Finance, highlighted the importance of the decision to ensure a transparent and efficient tax system that promotes business growth in the UAE. “The new Ministerial Decision clarifies the conditions under which a Person may continue or cease to be an Exempt Person from a different date as a result of an event or situation that goes beyond the Person’s control and could not have been reasonably foreseen or prevented.”
In such situations, the person shall submit an application to the FTA within 20 business days from the date it fails to meet the conditions to be exempt. The person is also expected to rectify the failure to meet the conditions within 20 business days from the submission of the application. This period may be extended by an additional 20 business days if the failure to rectify is beyond the person’s reasonable control.
Additionally, the ministerial decision addresses cases where a business no longer meets exemption conditions primarily to gain a corporate tax advantage. In such cases, the business will cease to be considered exempt on the date it no longer fulfils the exemption conditions.
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