Corporate Tax Exemptions in UAE: Eligible Entities & Criteria

As the UAE has launched its federal Corporate Tax regime, understanding available Corporate Tax Exemptions is utmost for companies to align their finance plan in 2025. As 9% is the default corporate tax rate, certain organisations like governmental institutions, qualifying investment funds, and certain free zone enterprises can be granted Corporate Tax Exemptions in the UAE.

These exemptions are defined by the Federal Tax Authority (FTA) and are rendered conditional on the fulfilment of specified conditions and continued eligibility. This guide describes who is eligible, on what conditions, and how exemptions are sustained in order to secure compliance with UAE tax legislation.

What Is a Corporate Tax Exemption?

A Corporate Tax Exemption is the legislative exclusion of some entities or types of income from the UAE Corporate Tax Law. The exemptions are provided to acknowledge the form, nature, or strategic value to the UAE economy of a company.

These entities are exempted from the standard 9% corporate tax on their taxable income, subject to the condition that they meet the required conditions as per the Federal Tax Authority (FTA) regulations. The exemptions apply to chosen government agencies, regulated investment funds, eligible public benefit organizations, and some free zone entities that undertake business within prescribed limits.

Eligible for Corporate Tax Exemption in UAE

Certain categories of entities are either automatically exempt or may qualify for Corporate Tax Exemptions in the UAE upon meeting specific legal and regulatory conditions. The table below outlines the classification of exempt persons, their exemption routes, and registration requirements under the UAE Corporate Tax Law:

Documents Required to Apply for Corporate Tax Exemptions in the UAE

To secure a corporate tax exemption, businesses must provide valid documentation proving their eligibility, structure, and income status. Below are the commonly required documents:

• Trade license or commercial registration certificate
• Certificate of Incorporation
• Audited financial statements
• Proof of income (e.g. invoices, bank statements)
• Economic substance report (for Free Zone entities)
• Proof of qualifying status (e.g. Cabinet Decision, regulatory licence, or ownership structure)
• Declaration of qualifying activity or purpose
• Organisational chart and list of shareholders/beneficiaries
• Any additional documents requested by the FTA, depending on entity type

Conclusion

The UAE has introduced a federal corporate tax regime with a standard rate of 9%. However, a range of corporate tax exemptions are available for certain entities, such as government institutions, qualifying investment funds, specific free zone businesses, and public benefit organizations. These exemptions are intended to support strategic sectors and maintain the UAE’s business-friendly environment.

Eligibility for corporate tax exemption is determined by the Federal Tax Authority (FTA) and is contingent on meeting prescribed legal and regulatory requirements. Exemptions may be automatic for some government-related entities or require registration and approval for others, such as investment funds and public benefit entities. Businesses operating in designated free zones must also meet economic substance requirements and conduct qualifying activities to benefit from exemptions.