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Article 1 Definitions changed

In the application of the provisions of this Decree-Law, the following words and expressions shall have meanings assigned against each, unless the context otherwise requires:

State: United Arab Emirates.

Federal Government: The government of the United Arab Emirates.

Local Government: Any of the governments of the Member Emirates of the Federation.

Ministry: Ministry of Finance.

Minister: Minister of Finance.

Authority: Federal Tax Authority.

Corporate Tax: The tax imposed by this Decree-Law on juridical persons and Business income.

Business: Any activity conducted regularly, on an ongoing and independent basis by any Person and in any location, such as industrial, commercial, agricultural, vocational, professional, service or excavation activities or any other activity related to the use of tangible or intangible properties.

Qualifying Income: Any income derived by a Qualifying Free Zone Person that is subject to Corporate Tax at the rate specified in paragraph (a) of Clause (2) of Article (3) of this Decree-Law.

Government Entity: The Federal Government, Local Governments, ministries, government departments, government agencies, authorities and public institutions of the Federal Government or Local Governments.

Government Controlled Entity: Any juridical person, directly or indirectly wholly owned and controlled by a Government Entity, as specified in a resolution issued by the Cabinet at the suggestion of the Minister.

Person: Any natural person or juridical person.

Business Activity: Any transaction or activity, or series of transactions or series of activities conducted by a Person in the course of its Business.

Mandated Activity: Any activity conducted by a Government Controlled Entity in accordance with the legal instrument establishing or regulating the entity, that is specified in a resolution issued by the Cabinet at the suggestion of the Minister.

State's Territory: The State's lands, territorial sea and airspace above it.

Natural Resources: Water, oil, gas, coal, naturally formed minerals, and other non-renewable, non-living natural resources that may be extracted from the State's Territory.

Extractive Business: The Business or Business Activity of exploring, extracting, removing, or otherwise producing and exploiting the Natural Resources of the State or any interest therein as determined by the Minister.

Non-Extractive Natural Resource Business: The Business or Business Activity of separating, treating, refining, processing, storing, transporting, marketing or distributing the Natural Resources of the State.

Qualifying Public Benefit Entity: Any entity that meets the conditions set out in Article (9) of this Decree-Law and that is listed in a resolution issued by the Cabinet at the suggestion of the Minister.

Qualifying Mutual Fund: Any entity whose principal activity is the issuing of investment interests to raise funds or pool investor funds or establish a joint mutual fund with the aim of enabling the holder of such an investment interest to benefit from the profits or gains from the entity's acquisition, holding, management or disposal of investments, in accordance with the applicable legislation and when it meets the conditions set out in Article (10) of this Decree-Law.

Exempt Person: A Person exempt from Corporate Tax under Article (4) of this Decree-Law.

Taxable Person: A Person subject to Corporate Tax in the State under this Decree-Law.

Licensing Authority: The competent authority concerned with licensing or authorizing a Business or Business Activity in the State.

License: A document issued by a Licensing Authority under which a Business or Business Activity is conducted in the State.

Taxable Income: The income that is subject to Corporate Tax under this Decree-Law.

Fiscal Year: The period specified in Article (57) of this Decree-Law.

Tax Return: Information filed with the Authority for Corporate Tax purposes in the form and manner as prescribed by the Authority, including any schedule or attachment thereto, and any amendment thereof.

Tax Period: The period for which a Tax Return is required to be filed.

Related Party: Any Person associated with a Taxable Person as determined in Clause (1) of Article (35) of this Decree-Law.

Revenue: The gross amount of income derived during a Tax Period.

Recognized Stock Exchange: Any stock exchange established in the State that is licensed and regulated by the relevant competent authority, or any stock exchange established outside the State of equal standing.

Resident Person: The Taxable Person specified in Clause (3) of Article (11) of this Decree-Law.

Non-Resident Person: The Taxable Person specified in Clause (4) of Article (11) of this Decree-Law.

Free Zone: A designated and defined geographic area within the State that is specified in a decision issued by the Cabinet at the suggestion of the Minister.

Free Zone Person: A juridical person incorporated, established or otherwise registered in a Free Zone, including a branch of a Non-Resident Person registered in a Free Zone.

Unincorporated Association: A relationship established under a contract between two or more Persons, such as a partnership or trust or any other similar association of Persons, in accordance with the applicable legislation of the State.

Permanent Establishment: A place of Business or other form of presence in the State of a Non-Resident Person in accordance with Article (14) of this Decree-Law.

State Sourced Income: Income accruing in, or derived from, the State as specified in Article (13) of this Decree-Law.

Qualifying Free Zone Person: A Free Zone Person that meets the conditions of Article (18) of this Decree-Law and is subject to Corporate Tax under Clause (2) of Article (3) of this Decree-Law.

Investment Manager: A Person who provides brokerage or investment management services that is subject to the regulatory oversight of the competent authority in the State.

Corporate Tax Payable: Corporate Tax that has or will become due for payment to the Authority in respect of one or more Tax Periods.

Foreign Partnership: A relationship established by contract between two or more Persons, such as a partnership or trust or any other similar association of Persons, in accordance with laws of a foreign jurisdiction.

Foreign Tax Credit: Tax paid under the laws of a foreign jurisdiction on income or profits that may be deducted from the Corporate Tax due, in accordance with the conditions of Clause (2) of Article (47) of this Decree-Law.

Family Foundation: Any foundation, trust or similar entity that meets the conditions of Article (17) of this Decree-Law.

Interest: Any amount accrued or paid for the use of money or credit, including discounts, premiums and profit paid in respect of an Islamic financial instrument and other payments economically equivalent to interest, and any other amounts incurred in connection with the raising of finance, excluding payments of the principal amount.

Accounting Income: The accounting net profit or loss for the relevant Tax Period as per the financial statements prepared in accordance with the provisions of Article (20) of this Decree-Law.

Exempt Income: Any income exempt from Corporate Tax under this Decree-Law.

Connected Person: Any Person affiliated with a Taxable Person as determined in Clause (2) of Article (36) of this Decree-Law.

Tax Loss: Any negative Taxable Income as calculated under this Decree-Law for a given Tax Period.

Qualified Business Activity: Any activity that is specified in a decision issued by the Cabinet at the suggestion of the Minister.

Foreign Permanent Establishment: A place of Business or other form of presence outside the State of a Resident Person that is determined in accordance with the criteria prescribed in Article (14) of this Decree-Law.

Market Value: The price which could be agreed in an arm's-length free market transaction between Persons who are not Related Parties or Connected Persons in similar circumstances.

Qualifying Group: Two or more Taxable Persons that meet the conditions of Clause (2) of Article (26) of this Decree-Law.

Net Interest Expense: Interest expense minus interest income as determined in accordance with the provisions of this Decree-Law.

Bank: A Person licensed in the State as a bank or finance institution or an equivalent licensed activity that allows the taking of deposits and the granting of credits as defined in the applicable legislation of the State.

Insurer: A Person licensed in the State as an Insurer that accepts risks by entering into or carrying out contracts of insurance, in both the life and non-life sectors, including contracts of reinsurance and captive insurance, as defined in the applicable legislation of the State.

Control: The direction and influence over one Person by another Person in accordance with the conditions of Clause (2) of Article (35) of this Decree-Law

Tax Group: Two or more Taxable Persons treated as a single Taxable Person according to the conditions of Article (40) of this Decree-Law.

Withholding Tax Credit: The Corporate Tax amount that can be deducted from the Corporate Tax due in accordance with the conditions of Clause (2) of Article (46) of this Decree-Law.

Withholding Tax: Corporate Tax to be withheld from State Sourced Income in accordance with Article (45) of this Decree-Law.

Tax Registration: A procedure under which a Person registers for Corporate Tax purposes with the Authority.

Tax Registration Number: A unique number issued by the Authority to each Person who is registered for Corporate Tax purposes in the State.

Tax Deregistration: A procedure under which a Person is deregistered for Corporate Tax purposes with the Authority.

Tax Procedures Law: The federal law that governs tax procedures in the State.

Administrative Fines: Amounts imposed and collected under this Decree-Law or the Tax Procedures Law.

Supplementary Tax: The supplementary tax to be imposed on multinational enterprises in accordance with this Decree-Law and the rules and regulations determined by the Cabinet in accordance with Article (3) of this Decree-Law, for the purposes of the Pillar Two Rules issued by the Organization for Economic Cooperation and Development.

Multinational Enterprise: it is an entity and/or one or more of its member entities located in the State or in a foreign territory, as determined by a resolution to be issued by the Cabinet based on the proposal of the Minister.

Article 3 Corporate Tax Rate changed

1. Corporate Tax shall be imposed on the Taxable Income at the following rates:

a. 0% (zero percent) on the portion of the Taxable Income not exceeding the amount specified by virtue of a resolution to be issued by the Cabinet at the suggestion of the Minister.

b. 9% (nine percent) on Taxable Income that exceeds the amount specified by virtue of a resolution to be resolution issued by the Cabinet at the suggestion of the Minister.

2. Corporate Tax shall be imposed on a Qualifying Free Zone Person at the following rates:

a. 0% (zero percent) on Qualifying Income.

b. 9% (nine percent) on Taxable Income that is not Qualifying Income under Article 18 of this Decree-Law and any resolution issued by the Cabinet at the suggestion of the Minister in respect thereof.

3. Without prejudice to the provisions of Clauses (1) and (2) of this Article, and based on the Minister's proposal, the Cabinet shall issue a decision regulating all cases, terms, conditions, rules, regulations and procedures for imposing the supplementary tax on multinational enterprises and the exemption from same, so that the total percentage of the actual tax imposed on them would be (15%) fifteen percent.

Article 45 Withholding Tax changed

1. The following income earned in the State by a non-resident person shall be subject to Withholding Tax tax at the a rate of 0% (zero percent) (0%) zero percent in form of withholding tax, or at any other rate as specified in for withholding tax to be determined by a decision issued by Cabinet resolution upon the Cabinet at the suggestion proposal of the Minister: Minister, to the extent that such income is not attributable to a permanent establishment or a connection in accordance with the provisions of Paragraph (A) or Paragraph (C) of Clause (3) of Article (12) of this Decree-Law.

a) The 2. As an exception to Clause (1) of this Article, the Cabinet may issue a resolution upon a proposal of the Minister to determine categories of State Sourced Income derived by a Non-Resident Person as prescribed income earned in the decision issued by the Cabinet pursuant State subject to this Article, insofar such income is not attributable to a Permanent Establishment of the Non-Resident Person withholding tax at rates specified in the State. that resolution.

b) Any 3. The Cabinet may issue a resolution upon a proposal of the Minister to determine any other income as subject to withholding tax at rates specified in a decision issued by the Cabinet at the suggestion of the Minister. that resolution.

2. 4. The Withholding Tax withholding tax that is payable under Clause 1 of this Article shall be deducted from the gross total amount of the payment and remitted paid to FTA in accordance with the Authority in the form forms and manner procedures and within the timeline prescribed period specified by FTA. The FTA may add controls or conditions for the Authority. purposes of implementing the provisions of this Clause.

Article 46 Withholding Tax Credit changed

1. If a Person person becomes subject to tax during a Taxable Person in a Tax Period, taxation period, the Person’s Corporate Tax due corporate tax payable under Article 3 (3) of this Decree-Law can may be reduced by an amount equal to the amount of Withholding Tax Credit the withholding tax credit for that Tax Period. the same taxation period.

2. The maximum Withholding Tax Credit withholding tax credit under this Decree-Law is shall be the lower of: lesser of the following:

a) a. The amount of Withholding Tax withholding tax deducted under Clause 2 (4) of Article 45 (45) of this Decree-Law.

b) b. The Corporate Tax due amount of corporate tax payable under this Decree-Law.

3. Any The excess Withholding Tax Credit withholding tax credit for a Tax Period the taxation period arising as a result of the application of Clause 2 (2) of this Article shall be refunded to the Taxable Person taxpayer, in accordance with Article 49 (49) of this Decree-Law.

Article 65 Revenue Sharing changed

Corporate Tax revenues Revenue from corporate tax, supplementary tax, and Administrative Penalties administrative fines collected under pursuant to this Decree-Law shall be subject to sharing between the Federal Government and the Local Governments based on local governments in accordance with the provisions of a the federal law issued in force in this regard.