Federal Decree-Law No. 47 of 2022 on the Taxation of Corporations and Businesses
His Highness Sheikh Mohamed bin Zayed Al Nahyan, President of the United Arab Emirates,
has issued the following Decree-Law:- Having reviewed the Constitution,- Federal Law No. 1 of 1972 on the Competencies of Ministries and Powers of the Ministers,

and its amendments,- Federal Law No. 26 of 1981 on the Commercial Maritime Law, and its amendments,- Federal Law No. 5 of 1985 promulgating the Civil Transactions Law, and its amendments,- Federal Law No. 18 of 1993 promulgating the Commercial Transactions Law, and its
amendments,- Federal Law No. 4 of 2000 on the Emirates Securities and Commodities Authority andMarket, and its amendments,- Federal Law No. 8 of 2004 on the Financial Free Zones,- Federal Law No. 6 of 2007 on the Regulation of Insurance Operations, and its
amendments,- Federal Law No. 2 of 2008 on the National Societies and Associations of Public Welfare,and its amendments,- Federal Law No. 8 of 2011 on the Reorganisation of the State Audit Institution,- Federal Law No. 4 of 2012 on the Regulation of Competition,- Federal Law No. 2 of 2014 on Small and Medium Enterprises,- Federal Law No. 12 of 2014 on the Organisation of the Auditing Profession, and its
amendments,- Federal Decree-Law No. 9 of 2016 on Bankruptcy, and its amendments,- Federal Decree-Law No. 13 of 2016 on the Establishment of the Federal Tax Authority,and its amendments,- Federal Law No. 7 of 2017 on Excise Tax, and its amendments,- Federal Decree-Law No. 7 of 2017 on Tax Procedures, and its amendments,- Federal Decree-Law No. 8 of 2017 on Value Added Tax, and its amendments,- Federal Decree-Law No. 14 of 2018 on the Central Bank and Organisation of Financial
Institutions and Activities, and its amendments,- Federal Decree-Law No. 15 of 2018 on the Collection of Public Revenue and Funds,- Federal Decree-Law No. 26 of 2019 on Public Finance,- Federal Decree-Law No. 19 of 2020 on Trust,- Federal Decree-Law No. 31 of 2021 promulgating the Crimes and Penalties Law, and its
amendments,- Federal Decree-Law No. 32 of 2021 on Commercial Companies,- Federal Decree-Law No. 37 of 2021 on Commercial Registry,- Federal Decree-Law No. 46 of 2021 on Electronic Transactions and Trust Services,

Federal Decree-Law No. 47 of 2022 - Unofficial translation1

- Federal Decree-Law No. 35 of 2022 promulgating the Law of Evidence in Civil andCommercial Transactions,- Pursuant to what was presented by the Minister of Finance and approved by the Cabinet,
Chapter One – General provisions
Article 1 – Definitions
In the application of the provisions of this Decree-Law, the following words and expressions
shall have the 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 theFederation.

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 andindependent basis by any Person and in any location, suchas industrial, commercial, agricultural, vocational,
professional, service or excavation activities or any otheractivity related to the use of tangible or intangible
properties.

Qualifying Income: Any income derived by a Qualifying Free Zone Person thatis subject to Corporate Tax at the rate specified inparagraph (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 adecision 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 orseries 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 orFederal Decree-Law No. 47 of 2022 - Unofficial translation2

regulating the entity, that is specified in a decision 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 othernon-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 ofthis Decree-Law and that is listed in a decision issued by
the Cabinet at the suggestion of the Minister.

Qualifying Investment Fund

: Any entity whose principal activity is the issuing ofinvestment interests to raise funds or pool investor funds
or establish a joint investment fund with the aim ofenabling the holder of such an investment interest to
benefit from the profits or gains from the entity’s
acquisition, holding, management or disposal ofinvestments, in accordance with the applicable legislation
and when it meets the conditions set out in Article 10 ofthis Decree-Law.

Exempt Person: A Person exempt from Corporate Tax under Article 4 of thisDecree-Law.

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

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

Licence: 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 thisDecree-Law.

Financial 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.
: The period for which a Tax Return is required to be filed.
: Any Person associated with a Taxable Person as

Tax Period
Related Party

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Revenue
Recognised Stock Exchange

determined in Clause 1 of Article 35 of this Decree-Law.
: The gross amount of income derived during a Tax Period.
: 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 thisDecree-Law.

Non-Resident Person: The Taxable Person specified in Clause 4 of Article 11 of thisDecree-Law.

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

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

Unincorporated Partnership : A relationship established by contract between two
Persons or more, such as a partnership or trust or any othersimilar association of Persons, in accordance with theapplicable legislation of the State.
Permanent Establishment: A place of Business or other form of presence in the Stateof a Non-Resident Person in accordance with Article 14 ofthis 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 18of 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
Persons or more, such as a partnership or trust or any othersimilar association of Persons, in accordance with laws of aforeign jurisdiction.

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

Family Foundation: Any foundation, trust or similar entity that meets theFederal Decree-Law No. 47 of 2022 - Unofficial translation

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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 ofan Islamic financial instrument and other payments
economically equivalent to interest, and any otheramounts 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 accordancewith the provisions of Article 20 of this Decree-Law.

Exempt Income: Any income exempt from Corporate Tax under this DecreeLaw.

Connected Person: Any Person affiliated with a Taxable Person as determinedin Clause 2 of Article 36 of this Decree-Law.

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

Qualifying 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 theState of a Resident Person that is determined inaccordance with the criteria prescribed in Article 14 of thisDecree-Law.

Market Value: The price which could be agreed in an arm’s-length freemarket 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 ofClause 2 of Article 26 of this Decree-Law.

Net Interest Expenditure: The Interest expenditure amount that is in excess of theInterest income amount as determined in accordance withthe provisions of this Decree-Law.

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

Insurance Provider: A Person licensed in the State as an insurance provider 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 definedin 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 ofArticle 35 of this Decree-Law.

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

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

Withholding Tax: Corporate Tax to be withheld from State Sourced Incomein 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 Penalties: Amounts imposed and collected under this Decree-Law or
the Tax Procedures Law.

Chapter Two – Imposition of Corporate Tax and Applicable Rates
Article 2 – Imposition of Corporate Tax
Corporate Tax shall be imposed on Taxable Income, at the rates determined under thisDecree-Law, and payable to the Authority under this Decree-Law and the Tax Procedures Law.
Article 3 – Corporate Tax Rate

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 amountspecified in a decision issued by the Cabinet at the suggestion of the Minister.

b) 9% (nine percent) on Taxable Income that exceeds the amount specified in adecision 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 18of this Decree-Law and any decision issued by the Cabinet at the suggestion of the
Minister in respect thereof.

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Chapter Three – Exempt Person
Article 4 – Exempt Person

1. The following Persons shall be exempt from Corporate Tax:a) A Government Entity.
b) A Government Controlled Entity.
c) A Person engaged in an Extractive Business, that meets the conditions of Article 7of this Decree-Law.

d) A Person engaged in a Non-Extractive Natural Resource Business, that meets theconditions of Article 8 of this Decree-Law.

e) A Qualifying Public Benefit Entity under Article 9 of this Decree-Law.
f) A Qualifying Investment Fund under Article 10 of this Decree-Law.
g) A public pension or social security fund, or a private pension or social security fundthat is subject to regulatory oversight of the competent authority in the State andthat meets any other conditions that may be prescribed by the Minister.

h) A juridical person incorporated in the State that is wholly owned and controlled by
an Exempt Person specified in paragraphs (a), (b), (f) and (g) of Clause 1 of this
Article and conducts any of the following:
1. Undertakes part or whole of the activity of the Exempt Person.
2. Is engaged exclusively in holding assets or investing funds for the benefit of
the Exempt Person.
3. Only carries out activities that are ancillary to those carried out by the Exempt
Person.

i) Any other Person as may be determined in a decision issued by the Cabinet at thesuggestion of the Minister.

2. A Person under paragraphs (a), (b), (c) and (d) of Clause 1 of this Article that is a Taxable
Person insofar as it relates to any Business or Business Activity under Articles 5, 6, 7 or 8of this Decree-Law, respectively, shall be treated as an Exempt Person for the purposesof Articles 26, 27, 38 and 40 of this Decree-Law.

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3. Persons specified in paragraphs (f), (g), (h) and (i) of Clause 1 of this Article, as applicable,
are required to apply to the Authority to be exempt from Corporate Tax in the form andmanner and within the timeline prescribed by the Authority in this regard.

4. The exemption from Corporate Tax under paragraphs (f), (g), (h) and (i) of Clause 1 of this
Article, as applicable, shall be effective from the beginning of the Tax Period specified in
the application, or any other date determined by the Authority.

5. In the event that the Exempt Person failed to meet any of the conditions under the
relevant provisions of this Decree-Law at any particular time during a Tax Period, such
Person shall cease to be an Exempt Person for the purposes of this Decree-Law from the
beginning of that Tax Period.

6. For the purposes of Clause 5 of this Article, the Minister may prescribe the conditions
under which a Person may continue to be an Exempt Person, or cease to be an Exempt
Person from a different date, in any of the following instances:a) Failure to meet the conditions is the result of the liquidation or termination of the
Person.

b) Failure to meet the conditions is of a temporary nature and will be promptly
rectified, and appropriate procedures are in place to monitor the compliance withthe relevant conditions of this Decree-Law.

c) Any other instances as may be prescribed by the Minister.
Article 5 – Government Entity

1. A Government Entity shall be exempt from Corporate Tax and the provisions of thisDecree-Law shall not apply to it.

2. Notwithstanding Clause 1 of this Article, a Government Entity shall be subject to theprovisions of this Decree-Law if it conducts a Business or Business Activity under a Licenceissued by a Licensing Authority.

3. Any Business or Business Activity conducted by a Government Entity under a Licenceissued by a Licensing Authority shall be treated as an independent Business, and theGovernment Entity shall keep financial statements for this Business separately from theGovernment Entity’s other activities.

4. The Government Entity shall calculate the Taxable Income for its Business or Business
Activity specified in Clause 2 of this Article independently for each Tax Period, in
accordance with the provisions of this Decree-Law.

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5. Transactions between the Business or Business Activity specified under Clause 2 of this
Article and the other activities of the Government Entity shall be considered Related
Party transactions subject to the provisions of Article 34 of this Decree-Law.

6. A Government Entity may apply to the Authority for all its Businesses and Business
Activities to be treated as a single Taxable Person for the purposes of this Decree-Law
subject to meeting the conditions to be prescribed by the Minister.
Article 6 – Government Controlled Entity
1. A Government Controlled Entity shall be exempt from Corporate Tax and the provisionsof this Decree-Law shall not apply to it.
2. Notwithstanding Clause 1 of this Article, a Government Controlled Entity shall be subject
to the provisions of this Decree-Law if it conducts a Business or Business Activity that is
not its Mandated Activities.
3. Any Business or Business Activity conducted by a Government Controlled Entity that is
not its Mandated Activity shall be treated as an independent Business, and theGovernment Controlled Entity shall keep financial statements for this Business separatelyfrom its Mandated Activity.
4. The Government Controlled Entity shall calculate the Taxable Income for its Business or
Business Activity that is not its Mandated Activity independently for each Tax Period, in
accordance with the provisions of this Decree-Law.
5. Transactions between the Business or Business Activity specified in Clause 2 of this Article
and the Mandated Activity of the Government Controlled Entity shall be considered
Related Party transactions subject to the provisions of Article 34 of this Decree-Law.
Article 7 – Extractive Business
1. A Person shall be exempt from Corporate tax and the provisions of this Decree-Law shallnot apply to its Extractive Business where all of the following conditions are met:a) The Person directly or indirectly holds or has an interest in a right, concession or
Licence issued by a Local Government to undertake its Extractive Business.
b) The Person is effectively subject to tax under the applicable legislation of an
Emirate in accordance with the provisions of Clause 6 of this Article.
c) The Person has made a notification to the Ministry in the form and manner agreed
with the Local Government.

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2. If a Person that meets the conditions of Clause 1 of this Article derives income from bothan Extractive Business and any other Business that is within the scope of this Decree-Law,
the following shall apply:a) The income derived from the Extractive Business shall be calculated and taxed
according to the applicable legislation of the Emirate.
b) The income derived from the other Business shall be subject to the provisions of
this Decree-Law, unless that other Business meets the conditions to be exempt
from Corporate Tax under Article 8 of this Decree-Law.
3. For the purposes of Clause 2 of this Article, a Person shall not be considered to deriveincome from any other Business where such other Business is ancillary or incidental tothat Person’s Extractive Business and the Revenue of such other Business in a Tax Period
does not exceed 5% (five percent) of the total Revenue of that Person in the same Tax
Period.
4. For the purposes of calculating the Taxable Income of the Person’s other Business, thefollowing shall apply:a) The other Business shall be treated as an independent Business, and financial
statements shall be kept for this Business separately from the Extractive Business.
b) Any common expenditure shared between the Extractive Business and the other
Business of the Person shall be apportioned in proportion to their Revenue in the
Tax Period, unless such expenditure is taken into account in different proportions
for the purposes of calculating the tax payable by the Person under the applicablelegislation of the relevant Emirate in respect of its Extractive Business, in which casethe expenditure will be apportioned in the latter proportion.
c) The Person shall calculate the Taxable Income for its other Business independently
for each Tax Period in accordance with the provisions of this Decree-Law.
5. Transactions between the Extractive Business and the other Business of the same Person
shall be considered Related Party transactions subject to the provisions of Article 34 of
this Decree-Law, unless such other Business is exempt from Corporate Tax under Article
8 of this Decree-Law.
6. A Person shall be considered effectively subject to tax under the applicable legislation of
the Emirate for the purposes of this Article if the Local Government imposes a tax onincome or profits, a royalty or revenue tax, or any other form of tax, charge or levy inrespect of such Person’s Extractive Business.

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7. The exemption under this Article shall not apply to contractors, subcontractors, suppliers
or any other Person used or contemplated to be used in any part of the performance of
the Extractive Business that does not in its own right meet the conditions to be exempt
from Corporate Tax under this Article or Article 8 of this Decree-Law.
Article 8 – Non-Extractive Natural Resource Business
1. A Person shall be exempt from Corporate tax and the provisions of this Decree-Law shallnot apply to its Non-Extractive Natural Resource Business where all of the following
conditions are met:a) The Person directly or indirectly holds or has an interest in a right, concession or
Licence issued by a Local Government to undertake its Non-Extractive Natural
Resource Business in the State.
b) The Person’s income from its Non-Extractive Natural Resource Business is derived
solely from Persons that undertake a Business or Business Activity.
c) The Person is effectively subject to tax under the applicable legislation of an
Emirate in accordance with the provisions of Clause 6 of this Article.
d) The Person has made a notification to the Ministry in the form and manner agreed
with the Local Government.
2. If a Person that meets the conditions of Clause 1 of this Article derives income from botha Non-Extractive Natural Resource Business and any other Business that is within thescope of this Decree-Law, the following shall apply:a) The income derived from the Non-Extractive Natural Resource Business shall becalculated and taxed according to the applicable legislation of the Emirate.
b) The income derived from the other Business shall be subject to this Decree-Law,
unless that other Business meets the conditions to be exempt from Corporate Tax
under Article 7 of this Decree-Law.
3. For the purposes of Clause 2 of this Article, a Person shall not be considered to deriveincome from any other Business where such other Business is ancillary or incidental tothat Person’s Non-Extractive Natural Resource Business and the Revenue of such other
Business in a Tax Period does not exceed 5% (five percent) of the total Revenue of that
Person in the same Tax Period.
4. For the purposes of calculating the Taxable Income of the Person’s other Business, thefollowing shall apply:

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11a) The other Business shall be treated as an independent Business, and financial
statements shall be kept for this Business separately from the Non-Extractive
Natural Resource Business.
b) Any common expenditure shared between the Non-Extractive Natural Resource
Business and other Business of the Person shall be apportioned in proportion totheir Revenue in a Tax Period, unless such expenditure is taken into account in adifferent proportion for the purposes of calculating the tax payable by the Person
under the applicable legislation of the relevant Emirate in respect of its NonExtractive Natural Resource Business, in which case the expenditure will beapportioned in the latter proportion.
c) The Person shall calculate the Taxable Income for the other Business independently
for each Tax Period in accordance with the provisions of this Decree-Law.
5. Transactions between the Non-Extractive Natural Resource Business and any other
Business of the same Person shall be considered Related Party transactions subject to theprovisions of Article 34 of this Decree-Law, unless such other Business is exempt from
Corporate Tax under Article 7 of this Decree-Law.
6. A Person shall be considered effectively subject to tax under the applicable legislation of
the Emirate, for the purposes of this Article if the Local Government imposes a tax onincome or profits, a royalty or revenue tax, or any other form of tax, charge or levy inrespect of such Person’s Non-Extractive Natural Resource Business.
7. The exemption under this Article shall not apply to contractors, subcontractors, suppliers
or any other Person used or contemplated to be used in any part of the performance of
the Non-Extractive Natural Resource Business that does not in its own right meets theconditions to be exempt from Corporate Tax under this Article or Article 7 of this DecreeLaw.
Article 9 – Qualifying Public Benefit Entity

1. A Qualifying Public Benefit Entity shall be exempt from Corporate Tax where all of thefollowing conditions are met:a) It is established and operated for any of the following:
1. Exclusively for religious, charitable, scientific, artistic, cultural, athletic,
educational, healthcare, environmental, humanitarian, animal protection orother similar purposes.
2. As a professional entity, chamber of commerce, or a similar entity operated

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exclusively for the promotion of social welfare or public benefit.
b) It does not conduct a Business or Business Activity, except for such activities that
directly relate to or are aimed at fulfilling the purpose for which the entity wasestablished.
c) Its income or assets are used exclusively in the furtherance of the purpose for which
it was established, or for the payment of any associated necessary and reasonable
expenditure incurred.
d) No part of its income or assets is payable to, or otherwise available, for the personal
benefit of any shareholder, member, trustee, founder or settlor that is not itself aQualifying Public Benefit Entity, Government Entity or Government Controlled
Entity.
e) Any other conditions as may be prescribed in a decision issued by the Cabinet atthe suggestion of the Minister.
2. The exemption under Clause 1 of this Article shall be effective from the beginning of theTax Period in which the Qualifying Public Benefit Entity is listed in the Cabinet decision
issued at the suggestion of the Minister or any other date determined by the Minister.
3. For the purposes of monitoring the continued compliance by a Qualifying Public Benefit
Entity with the conditions of Clause 1 of this Article, the Authority may request any
relevant information or records from the Qualifying Public Benefit Entity within thetimeline specified by the Authority.
Article 10 – Qualifying Investment Fund

1. An investment fund may apply to the Authority to be exempt from Corporate Tax as a
Qualifying Investment Fund where all of the following conditions are met:a) The investment fund or the investment fund’s manager is subject to the regulatory
oversight of a competent authority in the State, or a foreign competent authority
recognised for the purposes of this Article.
b) Interests in the investment fund are traded on a Recognised Stock Exchange, or aremarketed and made available sufficiently widely to investors.
c) The main or principal purpose of the investment fund is not to avoid Corporate Tax.
d) Any other conditions as may be prescribed in a decision issued by Cabinet at thesuggestion of the Minister.

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2. For the purposes of monitoring the continued compliance by a Qualifying Investment
Fund with the conditions of Clause 1 of this Article, the Authority may request any
relevant information or records within the timeline prescribed by the Authority.
Chapter Four – Taxable Person and Corporate Tax Base
Article 11 – Taxable Person

1. Corporate Tax shall be imposed on a Taxable Person at the rates determined under thisDecree-Law.

2. For the purposes of this Decree-Law, a Taxable Person shall be either a Resident Person
or a Non-Resident Person.

3. A Resident Person is any of the following Persons:a) A juridical person that is incorporated or otherwise established or recognised under
the applicable legislation of the State, including a Free Zone Person.
b) A juridical person that is incorporated or otherwise established or recognised under
the applicable legislation of a foreign jurisdiction that is effectively managed andcontrolled in the State.
c) A natural person who conducts a Business or Business Activity in the State.
d) Any other Person as may be determined in a decision issued by the Cabinet at thesuggestion of the Minister.

4. A Non-Resident Person is a Person who is not considered a Resident Person under Clause
3 of this Article and that either:a) Has a Permanent Establishment in the State as under Article 14 of this Decree-Law.
b) Derives State Sourced Income as under Article 13 of this Decree-Law.
c) Has a nexus in the State as specified in a decision issued by the Cabinet at thesuggestion of the Minister.

5. A branch in the State of a Person referred to in Clause 3 of this Article, shall be treated as
one and the same Taxable Person.

6. The Cabinet shall, upon a suggestion of the Minister and in coordination with the relevant
competent authorities, issue a decision specifying the categories of Business or Business
Activity conducted by a resident or non-resident natural person that are subject toFederal Decree-Law No. 47 of 2022 - Unofficial translation

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Corporate Tax under this Decree-Law.
Article 12 – Corporate Tax Base

1. A Resident Person, which is a juridical person, is subject to Corporate Tax on its Taxable
Income derived from the State or from outside the State, in accordance with theprovisions of this Decree-Law.

2. The Taxable Income of a Resident Person, which is a natural person, is the income derived
from the State or from outside the State insofar as it relates to the Business or Business
Activity conducted by the natural person in the State as set out in Clause 6 of Article 11of this Decree-Law.

3. A Non-Resident Person is subject to Corporate Tax on the following:a) The Taxable Income that is attributable to the Permanent Establishment of the
Non-Resident Person in the State.
b) State Sourced Income that is not attributable to a Permanent Establishment of the
Non-Resident Person in the State.
c) The Taxable Income that is attributable to the nexus of the Non-Resident Person in
the State as determined in a decision issued by the Cabinet pursuant to paragraph(c) of Clause 4 of Article 11 of this Decree-Law.
Article 13 – State Sourced Income

1. Income shall be considered State Sourced Income in any of the following instances:a) Where it is derived from a Resident Person.
b) Where it is derived from a Non-Resident Person and the income received has been
paid or accrued in connection with, and attributable to, a Permanent Establishmentof that Non-Resident Person in the State.
c) Where it is otherwise accrued in or derived from activities performed, assets
located, capital invested, rights used, or services performed or benefitted from in
the State.

2. Subject to any conditions and limitations that the Minister may determine, State Sourced
Income shall include, without limitation:a) Income from the sale of goods in the State.

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15b) Income from the provision of services that are rendered or utilised or benefitted
from in the State.
c) Income from a contract insofar as it has been wholly or partly performed or
benefitted from in the State.
d) Income from movable or immovable property in the State.
e) Income from the disposal of shares or capital of a Resident Person.
f) Income from the use or right to use in the State, or the grant of permission to use
in the State, any intellectual or intangible property.
g) Interest that meets any of the following conditions:
1. The loan is secured by movable or immovable property located in the State.
2. The borrower is a Resident Person.
3. The borrower is a Government Entity.
h) Insurance or reinsurance premiums in any of the following instances:
1. The insured asset is located in the State.
2. The insured Person is a Resident Person.
3. The insured activity is conducted in the State.
Article 14 – Permanent Establishment

1. A Non-Resident Person has a Permanent Establishment in the State in any of thefollowing instances:a) Where it has a fixed or permanent place in the State through which the Business of
the Non-Resident Person, or any part thereof, is conducted.
b) Where a Person has and habitually exercises an authority to conduct a Business or
Business Activity in the State on behalf of the Non-Resident Person.
c) Where it has any other form of nexus in the State as specified in a decision issued
by the Cabinet at the suggestion of the Minister.

2. For the purposes of paragraph (a) of Clause 1 of this Article, a fixed or permanent placein the State includes:

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16a) A place of management where management and commercial decisions that arenecessary for the conduct of the Business are, in substance, made.
b) A branch.
c) An office.
d) A factory.
e) A workshop.
f) Land, buildings and other real property.
g) An installation or structure for the exploration of renewable or non-renewable
natural resources.
h) A mine, an oil or gas well, a quarry or any other place of extraction of natural
resources, including vessels and structures used for the extraction of such
resources.
i) A building site, a construction project, or place of assembly or installation, or
supervisory activities in connection therewith, but only if such site, project or
activities, whether separately or together with other sites, projects or activities, lastmore than (6) six months, including connected activities that are conducted at thesite or project by one or more Related Parties of the Non-Resident Person.

3. Notwithstanding Clauses 1 and 2 of this Article, a fixed or permanent place in the State
shall not be considered a Permanent Establishment of a Non-Resident Person if it is usedsolely for any of the following purposes:a) Storing, displaying or delivering of goods or merchandise belonging to that Person.
b) Keeping a stock of goods or merchandise belonging to that Person for the sole
purpose of processing by another Person.
c) Purchasing goods or merchandise or collecting information for the Non-Resident
Person.
d) Conducting any other activity of a preparatory or auxiliary nature for the NonResident Person.
e) Conducting any combination of activities mentioned in paragraphs (a), (b), (c) and(d) of Clause 3 of this Article, provided that the overall activity is of a preparatory
or auxiliary nature.

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174. Clause 3 of this Article shall not apply to a fixed or permanent place in the State that isused or maintained by a Non-Resident Person if the same Non-Resident Person or its
Related Party carries on a Business or Business Activity at the same place or at anotherplace in the State where all of the following conditions are met:a) Where the same place or the other place constitutes a Permanent Establishmentof the Non-Resident Person or its Related Party.
b) The overall activity resulting from the combination of the activities carried out by
the Non-Resident Person and its Related Party at the same place or at the twoplaces is not of a preparatory or auxiliary nature and together would form acohesive Business operation, had the activities not been fragmented.

5. For the purposes of paragraph (b) of Clause 1 of this Article, a Person shall be considered
as having and habitually exercising an authority to conduct a Business or Business Activity
in the State on behalf of a Non-Resident Person if any of the following conditions are met:a) The Person habitually concludes contracts on behalf of the Non-Resident Person.
b) The Person habitually negotiates contracts that are concluded by the Non-Resident
Person without the need for material modification by the Non-Resident Person.

6. The provisions of Paragraph (b) of Clause 1 of this Article shall not apply where the Person
conducts a Business or Business Activity in the State as an independent agent and acts
for the Non-Resident Person in the ordinary course of that Business or Business Activity,
unless the Person acts exclusively or almost exclusively on behalf of the Non-Resident
Person, or where that Person cannot be considered legally or economically independent
from the Non-Resident Person.

7. For the purposes of Clause 3 of this Article, the Minister may prescribe the conditions
under which the mere presence of a natural person in the State does not create a
Permanent Establishment for a Non-Resident Person in any of the following instances:a) Where such presence is a consequence of a temporary and exceptional situation.
b) Where the natural person is employed by the Non-Resident Person, and all of thefollowing conditions are met:
1. The activities being conducted in the State by the natural person are not partof the core income-generating activities of the Non-Resident Person or its
Related Parties.
2. The Non-Resident Person does not derive State Sourced Income.

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Article 15 – Investment Manager Exemption

1. For the purposes of Clause 6 of Article 14 of this Decree-Law, an Investment Manager
shall be considered an independent agent when acting on behalf of a Non-Resident
Person, where all of the following conditions are met:a) The Investment Manager is engaged in the business of providing investment
management or brokerage services.
b) The Investment Manager is subject to the regulatory oversight of the competentauthority in the State.
c) The transactions are carried out in the ordinary course of the Investment
Manager’s Business.
d) The Investment Manager acts in relation to the transactions in an independentcapacity.
e) The Investment Manager transacts on an arm’s length basis with the Non-Resident
Person and receives due compensation for the provision of services.
f) The Investment Manager is not the Non-Resident Person’s representative in theState in relation to any other income or transaction that is subject to Corporate Tax
for the same Tax Period.
g) Any such other conditions as may be prescribed in a decision issued by the Cabinet
at the suggestion of the Minister.

2. For the purposes of Clause 1 of this Article, “transactions” means any of the following:a) Transactions in commodities, real property, bonds, shares, derivatives or securities
of any other description.
b) Transactions of buying or selling any foreign currency or placement of funds atinterest.
c) Such other transactions permissible to be carried out by the Investment Manager
on behalf of a Non-Resident Person under the applicable legislation of the State.
Article 16 – Partners in an Unincorporated Partnership

1. Unless an application is made under Clause 8 of this Article, and subject to any conditions
the Minister may prescribe, an Unincorporated Partnership shall not be considered aTaxable Person in its own right, and Persons conducting a Business as an Unincorporated

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19

Partnership shall be treated as individual Taxable Persons for the purposes of this DecreeLaw.

2. Where Clause 1 of this Article applies, a Person who is a partner in an Unincorporated
Partnership shall be treated as:a) Conducting the Business of the Unincorporated Partnership.
b) Having a status, intention, and purpose of the Unincorporated Partnership.
c) Holding assets that the Unincorporated Partnership holds.
d) Being party to any arrangement to which the Unincorporated Partnership is a party.

3. For the purposes of Clause 1 of this Article, the assets, liabilities, income and expenditureof the Unincorporated Partnership shall be allocated to each partner in proportion totheir distributive share in that Unincorporated Partnership, or in the manner prescribedby the Authority where the distributive share of a partner cannot be identified.

4. The Taxable Income of a partner in an Unincorporated Partnership shall take into accountthe following:a) Expenditure incurred directly by the partner in conducting the Business of the
Unincorporated Partnership.
b) Interest expenditure incurred by the partner in relation to contributions made to
the capital account of the Unincorporated Partnership.

5. Interest paid by an Unincorporated Partnership to a partner on their capital account shallbe treated as an allocation of income to the partner and is therefore not a deductible
expenditure for calculating the Taxable Income of the partner in the Unincorporated
Partnership.

6. For the purposes of calculating and settling the Corporate Tax Payable of a partner in an
Unincorporated Partnership under Chapter Thirteen of this Decree-Law, any foreign tax
incurred by the Unincorporated Partnership shall be allocated as a Foreign Tax Credit toeach partner in proportion to their distributive share in the Unincorporated Partnership.

7. A Foreign Partnership shall be treated as an Unincorporated Partnership for the purposesof this Decree-Law where all of the following conditions are met:a) The Foreign Partnership is not subject to tax under the laws of the foreign
jurisdiction.

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20b) Each partner in the Foreign Partnership is individually subject to tax with regards
to their distributive share of any income of the Foreign Partnership as and when
the income is received by or accrued to the Foreign Partnership.
c) Any other conditions as may be prescribed by the Minister.

8. The partners in an Unincorporated Partnership can make an application to the Authority
for the Unincorporated Partnership to be treated as a Taxable Person.

9. Where an application under Clause 8 of this Article is approved:a) The provisions of Clauses 1 to 6 of this Article shall no longer apply to the partners
in the Unincorporated Partnership in respect of the Business conducted by the
Unincorporated Partnership.
b) Each partner in the Unincorporated Partnership shall remain jointly and severally
liable for the Corporate Tax Payable by the Unincorporated Partnership for thoseTax Periods when they are partners in the Unincorporated Partnership.
c) One partner in the Unincorporated Partnership shall be appointed as the partner
responsible for any obligations and proceedings in relation to this Decree-Law onbehalf of the Unincorporated Partnership.

10. Where the application under Clause 8 of this Article is approved, the Unincorporated
Partnership shall be treated as a Taxable Person effective from the commencement of
the Tax Period in which the application is made, or from the commencement of a future
Tax Period, or any other date determined by the Authority.
Article 17 – Family Foundation

1. A Family Foundation can make an application to the Authority to be treated as an
Unincorporated Partnership for the purposes of this Decree-Law where all of thefollowing conditions are met:a) The Family Foundation was established for the benefit of identified or identifiable
natural persons, or for the benefit of a public benefit entity, or both.
b) The principal activity of the Family Foundation is to receive, hold, invest, disburse,
or otherwise manage assets or funds associated with savings or investment.
c) The Family Foundation does not conduct any activity that would have constituteda Business or Business Activity under Clause 6 of Article 11 of this Decree-Law had
the activity been undertaken, or its assets been held, directly by its founder, settlor,Federal Decree-Law No. 47 of 2022 - Unofficial translation21

or any of its beneficiaries.
d) The main or principal purpose of the Family Foundation is not the avoidance ofCorporate Tax.
e) Any other conditions as may be prescribed by the Minister.

2. Where the application under Clause 1 of this Article is approved, the Family Foundation
shall be treated as an Unincorporated Partnership effective from the commencement of
the Tax Period in which the application is made, or from the commencement of a future
Tax Period, or any other date determined by the Authority.

3. For the purposes of monitoring the continued compliance by a Family Foundation withthe conditions of Clause 1 of this Article, the Authority may request any relevant
information or records from the Family Foundation within the timeline specified by the
Authority.
Chapter Five – Free Zone Person
Article 18 – Qualifying Free Zone Person

1. A Qualifying Free Zone Person is a Free Zone Person that meets all of the following
conditions:a) Maintains adequate substance in the State.
b) Derives Qualifying Income as specified in a decision issued by the Cabinet at thesuggestion of the Minister.
c) Has not elected to be subject to Corporate Tax under Article 19 of this Decree-Law.
d) Complies with Articles 34 and 55 of this Decree-Law.
e) Meets any other conditions as may be prescribed by the Minister.

2. A Qualifying Free Zone Person that fails to meet any of the conditions under Clause 1 ofthis Article at any particular time during a Tax Period shall cease to be a Qualifying Free
Zone Person from the beginning of that Tax Period.

3. Notwithstanding Clause 2 of this Article, the Minister may prescribe the conditions or
circumstances under which a Person may continue to be a Qualifying Free Zone Person,
or cease to be a Qualifying Free Zone Person from a different date.

4. The application of paragraph (a) of Clause 2 of Article 3 of this Decree-Law to a Qualifying

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22

Free Zone Person shall apply for the remainder of the tax incentive period stipulated in
the applicable legislation of the Free Zone in which the Qualifying Free Zone Person isregistered, which period may be extended in accordance with any conditions as may be
determined in a decision issued by the Cabinet at the suggestion of the Minister, but any
one period shall not exceed (50) fifty years.
Article 19 – Election to be Subject to Corporate Tax

1. A Qualifying Free Zone Person can make an election to be subject to Corporate Tax at therates specified under Clause 1 of Article 3 of this Decree-Law.

2. The election under Clause 1 of this Article shall be effective from either of:a) The commencement of the Tax Period in which the election is made.
b) The commencement of the Tax Period following the Tax Period in which theelection was made.
Chapter Six – Calculating Taxable Income
Article 20 – General Rules for Determining Taxable Income

1. The Taxable Income of each Taxable Person shall be determined separately, on the basisof adequate, standalone financial statements prepared for financial reporting purposesin accordance with accounting standards accepted in the State.

2. The Taxable Income for a Tax Period shall be the Accounting Income for that period, andto the extent applicable, adjusted for the following:a) Any unrealised gain or loss under Clause 3 of this Article.
b) Exempt Income as specified in Chapter Seven of this Decree-Law.
c) Reliefs as specified in Chapter Eight of this Decree-Law.
d) Deductions as specified in Chapter Nine of this Decree-Law.
e) Transactions with Related Parties and Connected Persons as specified in Chapter
Ten of this Decree-Law.
f) Tax Loss relief as specified in Chapter Eleven of this Decree-Law.
g) Any incentives or special reliefs for a Qualifying Business Activity as specified in adecision issued by the Cabinet at the suggestion of the Minister.

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23h) Any income or expenditure that has not otherwise been taken into account indetermining the Taxable Income under the provisions of this Decree-Law as may be
specified in a decision issued by the Cabinet at the suggestion of the Minister.
i) Any other adjustments as may be specified by the Minister.

3. For the purposes of calculating the Taxable Income for the relevant Tax Period, andsubject to any conditions that the Minister may prescribe, a Taxable Person that prepares
financial statements on an accrual basis may elect to take into account gains and losses
on a realisation basis in relation to:a) all assets and liabilities that are subject to fair value or impairment accounting
under the applicable accounting standards; orb) all assets and liabilities held on capital account at the end of a Tax Period, whilst
taking into account any unrealised gain or loss that arises in connection with assets
and liabilities held on revenue account at the end of that period.

4. For the purposes of paragraph (b) of Clause 3 of this Article:a) “Assets held on capital account” refers to assets that the Person does not trade,assets that are eligible for depreciation, or assets treated under applicableaccounting standards as property, plant and equipment, investment property,
intangible assets, or other non-current assets.
b) “Liabilities held on capital account” refers to liabilities, the incurring of which does
not give rise to deductible expenditure under Chapter Nine of this Decree-Law, or
liabilities treated under applicable accounting standards as non-current liabilities.
c) “Assets and liabilities held on revenue account” refers to assets and liabilities otherthan those held on a capital account.
d) An “unrealised gain or loss” includes an unrealised foreign exchange gain or loss.

5. Notwithstanding Clauses 1 and 3 of this Article, the Minister may prescribe any of thefollowing for the purposes of this Decree-Law:a) The circumstances and conditions under which a Person may prepare financial
statements using the cash basis of accounting.
b) Any adjustments to the accounting standards to be applied for the purposes ofdetermining the Taxable Income for a Tax Period.
c) A different basis for determining the Taxable Income of a Qualifying Business

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24

Activity.

6. Subject to any conditions prescribed under Clause 5 of this Article, a Taxable Person canmake an application to the Authority to change its method of accounting from cash basis
to accrual basis from the commencement of the Tax Period in which the application ismade or from the commencement of a future Tax Period.

7. In the case of any conflict between the provisions of this Decree-Law and the applicableaccounting standards, the provisions of this Decree-Law shall prevail to that extent.
Article 21 – Small Business Relief
1. A Taxable Person that is a Resident Person may elect to be treated as not having derived
any Taxable Income for a Tax Period where:a) the Revenue of the Taxable Person for the relevant Tax Period and previous Tax
Periods does not exceed a threshold to be set by the Minister; andb) the Taxable Person meets all other conditions prescribed by the Minister.
2. Where Clause 1 of this Article applies to a Taxable Person, the following provisions of thisDecree-Law shall not apply:a) Exempt Income as specified in Chapter Seven of this Decree-Law.
b) Reliefs as specified in Chapter Eight of this Decree-Law.
c) Deductions as specified in Chapter Nine of this Decree-Law.
d) Tax Loss relief as specified in Chapter Eleven of this Decree-Law.
e) Article 55 of this Decree-Law.
3. The Authority may take the necessary measures to verify the compliance with theconditions of Clause 1 of this Article, and may request any relevant information orrecords from the Taxable Person within the timeline prescribed by the Authority.
Chapter Seven – Exempt Income
Article 22 – Exempt Income
The following income and related expenditure shall not be taken into account in determining
the Taxable Income:
1. Dividends and other profit distributions received from a juridical person that is a Resident

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25Person.
2. Dividends and other profit distributions received from a Participating Interest in a foreignjuridical person as specified in Article 23 of this Decree-Law.
3. Any other income from a Participating Interest as specified in Article 23 of this DecreeLaw.
4. Income of a Foreign Permanent Establishment that meets the condition of Article 24 ofthis Decree-Law.
5. Income derived by a Non-Resident Person from operating aircraft or ships ininternational transportation that meets the conditions of Article 25 of this Decree-Law.
Article 23 – Participation Exemption
1. Income from a Participating Interest shall be exempt from Corporate Tax, subject to theconditions of this Article.
2. A Participating Interest means, a 5% (five percent) or greater ownership interest in theshares or capital of a juridical person, referred to as a “Participation” for the purposes ofthis Chapter where all of the following conditions are met:a) The Taxable Person has held, or has the intention to hold, the Participating Interest
for an uninterrupted period of at least (12) twelve months.
b) The Participation is subject to Corporate Tax or any other tax imposed under theapplicable legislation of the country or territory in which the juridical person isresident which is of a similar character to Corporate Tax at a rate not less than therate specified in paragraph (b) of Clause 1 of Article 3 of this Decree-Law.
c) The ownership interest in the Participation entitles the Taxable Person to receive
not less than 5% (five percent) of the profits available for distribution by theParticipation, and not less than 5% (five percent) of the liquidation proceeds on
cessation of the Participation.
d) Not more than 50% (fifty percent) of the direct and indirect assets of theParticipation consist of ownership interests or entitlements that would not havequalified for an exemption from Corporate Tax under this Article if held directly by
the Taxable Person, subject to any conditions that may be prescribed underparagraph (e) of this Clause.
e) Any other conditions as may be prescribed by the Minister.

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26

3. A Participation shall be treated as having met the condition under paragraph (b) of Clause
2 of this Article where all of the following conditions are met:a) The principal objective and activity of the Participation is the acquisition andholding of shares or equitable interests that meet the conditions of Clause 2 of this
Article.
b) The income of the Participation derived during the relevant Tax Period or Tax
Periods substantially consists of income from Participating Interests.
4. A Participation in a Qualifying Free Zone Person or an Exempt Person shall be treated ashaving met the condition under paragraph (b) of Clause 2 of this Article, subject to any
conditions that may be prescribed by the Minister.
5. Where the conditions of Clause 2 of this Article continue to be met, the following income
shall not be taken into account in determining Taxable Income:a) Dividends and other profit distributions received from a foreign Participation thatis not a Resident Person under paragraph (b) of Clause 3 of Article 11 of this DecreeLaw.
b) Gains or losses on the transfer, sale, or other disposition of a Participating Interest(or part thereof) derived after expiry of the time period specified in paragraph (a)of Clause 2 or Clause 9 of this Article.
c) Foreign exchange gains or losses in relation to a Participating Interest.
d) Impairment gains or losses in relation to a Participating Interest.
6. The exemption under this Article shall not apply to income derived by the Taxable Personfrom a Participating Interest insofar as:a) the Participation can claim a deduction for the dividend or other distributions madeto the Taxable Person under the applicable tax legislation;b) the Taxable Person has recognised a deductible impairment loss in respect of theParticipating Interest prior to the Participating Interest meeting the conditions ofClause 2 of this Article;c) the Taxable Person or its Related Party who is subject to Corporate Tax under thisDecree-Law has recognised a deductible impairment loss in respect of a loan
receivable from the Participation.
7. Where the impairment loss referred to in paragraph (c) of Clause 6 of this Article isFederal Decree-Law No. 47 of 2022 - Unofficial translation27

reversed in a subsequent Tax Period, the associated income of the Taxable Person shallbe exempt from Corporate Tax in that Tax Period up to the amount of income from theParticipating Interest that was not exempted under paragraph (c) of Clause 6 of this
Article.
8. The exemption under this Article does not apply to a loss realised on the liquidation of a
Participation.
9. The exemption under this Article shall not apply for a period of (2) two years where a
Participation was acquired in exchange for the transfer of an ownership interest that did
not meet the conditions of Clause 2 of this Article or a transfer that was exempted under
Article 26 or 27 of this Decree-Law.
10. Where a Taxable Person fails to hold a 5% (five percent) or greater ownership interestin the Participation for an uninterrupted period of at least (12) twelve months, any
income previously not taken into account under this Article shall be included in thecalculation of the Taxable Income in the Tax Period in which the ownership interest in
the Participation falls below 5% (five percent).
11. The Minister may prescribe that an ownership interest in the shares or capital of ajuridical person meets the minimum ownership requirement under Clause 2 of this
Article where the acquisition cost of that ownership interest exceeds a thresholdspecified by the Minister.
Article 24 – Foreign Permanent Establishment Exemption
1. A Resident Person can make an election to not take into account the income, andassociated expenditure, of its Foreign Permanent Establishments in determining its
Taxable Income.
2. Where Clause 1 of this Article applies, a Resident Person shall not take into account thefollowing in determining its Taxable Income or Corporate Tax Payable for a Tax Period:a) losses in any of its Foreign Permanent Establishments, calculated as if the relevant
Foreign Permanent Establishments were a Resident Person under this Decree-Law;b) positive income and associated expenditure in any of its Foreign Permanent
Establishments, calculated as if the relevant Foreign Permanent Establishments
were a Resident Person under this Decree-Law; andc) any Foreign Tax Credit that would have been available under Article 47 of thisDecree-Law had the election under Clause 1 of this Article not been made.

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3. For the purposes of this Article, “income and associated expenditure” of a Taxable
Person’s Foreign Permanent Establishments for a Tax Period is the aggregate of theincome and associated expenditure in each of the relevant foreign jurisdictions.
4. In determining the income and associated expenditure of a Foreign Permanent
Establishment, a Resident Person and each of its Foreign Permanent Establishments shallbe treated as separate and independent Persons.
5. For the purposes of Clause 4 of this Article, a transfer of assets or liabilities between a
Resident Person and its Foreign Permanent Establishment shall be treated as having
taken place at Market Value at the date of the transfer for the purposes of determining
the Taxable Income of that Resident Person.
6. The exemption under Clause 1 of this Article shall apply to all Foreign Permanent
Establishments of the Resident Person that meet the condition specified in Clause 7 ofthis Article.
7. The exemption under Clause 1 of this Article shall only apply to a Foreign Permanent
Establishment that is subject to Corporate Tax or a tax of a similar character under theapplicable legislation of the relevant foreign jurisdiction at a rate not less than the rate
specified in paragraph (b) of Clause 1 of Article 3 of this Decree-Law.
Article 25 – Non-Resident Person Operating Aircraft or Ships in International Transportation
Income derived by a Non-Resident Person from the operation of aircraft or ships ininternational transportation shall not be subject to Corporate Tax where all of the following
conditions are met:
1. The Non-Resident Person is in the Business of any of the following:a) International transport of passengers, livestock, mail, parcels, merchandise or
goods by air or by sea.
b) Leasing or chartering aircrafts or ships used in international transportation.
c) Leasing of equipment which are integral to the seaworthiness of ships or the
airworthiness of aircrafts used in international transportation.
2. A Resident Person that performs any of the activities under Clause 1 of this Article would
be exempt, or not be subject to tax that is of a similar character to Corporate Tax, under
the applicable legislation of the country or territory in which the Non-Resident Person isresident.
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29

Article 26 – Transfers Within a Qualifying Group
1. No gain or loss needs to be taken into account in determining the Taxable Income inrelation to the transfer of one or more assets or liabilities between two Taxable Persons
that are members of the same Qualifying Group.
2. Two Taxable Persons shall be treated as members of the same Qualifying Group where
all of the following conditions are met:a) The Taxable Persons are juridical persons that are Resident Persons, or NonResident Persons that have a Permanent Establishment in the State.
b) Either Taxable Person has a direct or indirect ownership interest of at least 75%(seventy-five percent) in the other Taxable Person, or a third Person has a direct orindirect ownership interest of at least 75% (seventy-five percent) in each of theTaxable Persons.
c) None of the Persons are an Exempt Person.
d) None of the Persons are a Qualifying Free Zone Person.
e) The Financial Year of each of the Taxable Persons ends on the same date.
f) Both Taxable Persons prepare their financial statements using the same accounting
standards.
3. For the purposes of this Decree-Law, where a Taxable Person applies Clause 1 of this
Article:a) the asset or liability shall be treated as being transferred at its net book value atthe time of transfer so that neither a gain nor a loss arises; andb) the value of any consideration paid or received against the transfer of the asset or
liability shall equal the net book value of the transferred asset or liability.
4. The provision of Clause 1 of this Article shall not apply where, within (2) two years fromthe date of the transfer, any of the following occurs:a) There is a subsequent transfer of the asset or liability outside of the Qualifying
Group.
b) The Taxable Persons cease to be members of the same Qualifying Group.
5. Where Clause 4 of this Article applies, the transfer of the asset or liability shall be treatedFederal Decree-Law No. 47 of 2022 - Unofficial translation30

as having taken place at Market Value at the date of the transfer for the purposes ofdetermining the Taxable Income of both Taxable Persons for the relevant Tax Period.
Article 27 – Business Restructuring Relief
1. No gain or loss needs to be taken into account in determining Taxable Income in any of
the following circumstances:a) A Taxable Person transfers its entire Business or an independent part of its Businessto another Person who is a Taxable Person or will become a Taxable Person as aresult of the transfer in exchange for shares or other ownership interests of theTaxable Person that is the transferee.
b) One or more Taxable Persons transfer their entire Business to another Person who
is a Taxable Person or will become a Taxable Person as a result of the transfer inexchange for shares or other ownership interests of the Taxable Person that is thetransferee, and the Taxable Person or Taxable Persons that are the transferor cease
to exist as a result of the transfer.
2. Clause 1 of this Article applies where all of the following conditions are met:a) The transfer is undertaken in accordance with, and meets all the conditions
imposed by, the applicable legislation of the State.
b) The Taxable Persons are Resident Persons, or Non-Resident Persons that have a
Permanent Establishment in the State.
c) None of the Persons are an Exempt Person.
d) None of the Persons are a Qualifying Free Zone Person.
e) The Financial Year of each of the Taxable Persons ends on the same date.
f) The Taxable Persons prepare their financial statements using the same accounting
standards.
g) The transfer under Clause 1 of this Article is undertaken for valid commercial orother non-fiscal reasons which reflect economic reality.
3. For the purposes of this Decree-Law, where a Taxable Person applies Clause 1 of this
Article, all of the following must be observed:a) The assets and liabilities transferred shall be treated as being transferred at their
net book value at the time of transfer so that neither a gain nor a loss arises.

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31b) The value of the shares or ownership interests received under paragraph (a) of
Clause 1 of this Article shall not exceed the net book value of the assets transferredand liabilities assumed, less the value of any other form of consideration received.
c) The value of the shares or ownership interests received under paragraph (b) of
Clause 1 of this Article shall not exceed the book value of the shares or ownershipinterests surrendered, less the value of any other form of consideration received.
d) Any unutilised Tax Losses incurred by the Taxable Person that is the transferor prior
to the Tax Period in which the transfer under Clause 1 of this Article completes may
become carried forward Tax Losses of the Taxable Person that is the transferee,subject to conditions to be prescribed by the Minister.
4. The provisions of this Article shall apply, as the context requires, where, in the case of atransfer under Clause 1 of this Article:a) shares or ownership interests are received by a Person other than the Taxable
Person that is the transferor;b) shares or ownership interests are issued or granted by a Person other than the
Taxable Person that is the transferee; orc) no shares or ownership interests are received by the Taxable Person who is apartner in an Unincorporated Partnership that is treated as a Taxable Person under
Clause 9 of Article 16 of this Decree-Law.
5. Where a Taxable Person transfers an independent part of its Business, paragraph (d) of
Clause 3 of this Article shall apply only to those unutilised Tax Losses that can bereasonably attributed to the independent part of the Business being transferred.
6. The provision of Clause 1 of this Article shall not apply where, within (2) two years fromthe date of the transfer, any of the following occurs:a) The shares or other ownership interests in the Taxable Person that is the transferor
or the transferee are sold, transferred or otherwise disposed of, in whole or part,to a Person that is not a member of the Qualifying Group to which the relevantTaxable Persons belong.
b) There is a subsequent transfer or disposal of the Business or the independent partof the Businesses transferred under Clause 1 of this Article.
7. Where Clause 6 of this Article applies, the transfer of the Business or the independent
part of the Business shall be treated as having taken place at Market Value at the date ofFederal Decree-Law No. 47 of 2022 - Unofficial translation

32

the transfer.
Chapter Nine – Deductions
Article 28 – Deductible Expenditure
1. Expenditure incurred wholly and exclusively for the purposes of the Taxable Person’s
Business that is not capital in nature shall be deductible in the Tax Period in which it isincurred, subject to the provisions of this Decree-Law.
2. For the purposes of calculating the Taxable Income for a Tax Period, no deduction isallowed for the following:a) Expenditure not incurred for the purposes of the Taxable Person’s Business.
b) Expenditure incurred in deriving Exempt Income.
c) Losses not connected with or arising out of the Taxable Person’s Business.
d) Such other expenditure as may be specified in a decision issued by the Cabinet atthe suggestion of the Minister.
3. If expenditure is incurred for more than one purpose, a deduction shall be allowed for:a) Any identifiable part or proportion of the expenditure incurred wholly andexclusively for the purposes of deriving Taxable Income.
b) An appropriate proportion of any unidentifiable part or proportion of theexpenditure incurred for the purposes of deriving Taxable Income that has been
determined on a fair and reasonable basis, having regard to the relevant facts andcircumstances of the Taxable Person’s Business.
Article 29 – Interest ExpenditureNotwithstanding paragraph (b) of Clause 2 of Article 28 of this Decree-Law, Interest
expenditure shall be deductible in the Tax Period in which it is incurred, subject to the otherprovisions of Article 28 and Articles 30 and 31 of this Decree-Law.
Article 30 – General Interest Deduction Limitation Rule
1. A Taxable Person’s Net Interest Expenditure shall be deductible up to 30% (thirty
percent) of the Taxable Person’s accounting earnings before the deduction of interest,
tax, depreciation and amortisation (EBITDA) for the relevant Tax Period, excluding any
Exempt Income under Article 22 of this Decree-Law.

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2. A Taxable Person’s Net Interest Expenditure for a Tax Period is the amount by which theInterest expenditure incurred during the Tax Period, including the amount of any Net
Interest Expenditure carried forward under Clause 4 of this Article, exceeds the taxable
Interest income derived during that same period.

3. The limitation under Clause 1 of this Article shall not apply where the Net Interest
Expenditure of the Taxable Person for the relevant Tax Period does not exceed anamount specified by the Minister.
4. The amount of Net Interest Expenditure disallowed under Clause 1 of this Article may be
carried forward and deducted in the subsequent (10) ten Tax Periods in the order inwhich the amount was incurred, subject to Clauses 1 and 2 of this Article.
5. Interest expenditure disallowed under any other provision of this Decree-Law shall be
excluded from the calculation of Net Interest Expenditure under Clause 2 of this Article.
6. Clauses 1 to 5 of this Article shall not apply to the following Persons:a) A Bank.
b) An Insurance Provider.
c) A natural person undertaking a Business or Business Activity in the State.
d) Any other Person as may be determined by the Minister.
7. The Minister may issue a decision to specify the application of Clauses 1 and 2 of this
Article to a Taxable Person that is related to one or more Persons through ownership orcontrol and there is an obligation on them under applicable accounting standards fortheir financial statements to be consolidated.
Article 31 – Specific Interest Deduction Limitation Rule
1. No deduction shall be allowed for Interest expenditure incurred on a loan obtained,
directly or indirectly, from a Related Party in respect of any of the following transactions:a) A dividend or profit distribution to a Related Party.
b) A redemption, repurchase, reduction or return of share capital to a Related Party.
c) A capital contribution to a Related Party.
d) The acquisition of an ownership interest in a Person who is or becomes a RelatedFederal Decree-Law No. 47 of 2022 - Unofficial translation

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Party following the acquisition.
2. Clause 1 of this Article shall not apply where the Taxable Person can demonstrate thatthe main purpose of obtaining the loan and carrying out the transaction referred tounder Clause 1 of this Article is not to gain a Corporate Tax advantage.
3. For the purposes of Clause 2 of this Article, no Corporate Tax advantage shall be deemed
to arise where the Related Party is subject to Corporate Tax or a tax of a similar character
under the applicable legislation of a foreign jurisdiction on the Interest at a rate not lessthan the rate specified in paragraph (b) of Clause 1 of Article 3 of this Decree-Law.
Article 32 – Entertainment Expenditure
1. Subject to Article 28 of this Decree-Law, a Taxable Person shall be allowed to deduct 50%(fifty percent) of any entertainment, amusement, or recreation expenditure incurred
during a Tax Period.
2. Clause 1 of this Article applies to any expenditure incurred for the purposes of receiving
and entertaining the Taxable Person’s customers, shareholders, suppliers or otherbusiness partners, including, but not limited to, expenditure in connection with any of
the following:a) Meals.
b) Accommodation.
c) Transportation.
d) Admission fees.
e) Facilities and equipment used in connection with such entertainment, amusement
or recreation.
f) Such other expenditure as specified by the Minister.
Article 33 – Non-deductible Expenditure
No deduction is allowed for:
1. Donations, grants or gifts made to an entity that is not a Qualifying Public Benefit Entity.
2. Fines and penalties, other than amounts awarded as compensation for damages orbreach of contract.
3. Bribes or other illicit payments.

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4. Dividends, profit distributions or benefits of a similar nature paid to an owner of theTaxable Person.
5. Amounts withdrawn from the Business by a natural person who is a Taxable Person underparagraph (c) of Clause 3 of Article 11 of this Decree-Law or a partner in an
Unincorporated Partnership.
6. Corporate Tax imposed on a Taxable Person under this Decree-Law.
7. Input Value Added Tax incurred by a Taxable Person that is recoverable under Federal
Decree-Law No. (8) of 2017 referred to in the preamble and what replaces it.
8. Tax on income imposed on the Taxable Person outside the State.
9. Such other expenditure as specified in a decision issued by the Cabinet at the suggestionof the Minister.
Chapter Ten – Transactions with Related Parties and Connected Persons
Article 34 – Arm’s Length Principle
1. In determining Taxable Income, transactions and arrangements between Related Parties
must meet the arm’s length standard as specified in Clauses 2, 3, 4 and 5 of this Article
and any conditions that may be prescribed in a decision issued by the Authority.
2. A transaction or arrangement between Related Parties meets the arm’s length standard
if the results of the transaction or arrangement are consistent with the results that would
have been realised if Persons who were not Related Parties had engaged in a similartransaction or arrangement under similar circumstances.
3. The arm’s length result of a transaction or arrangement between Related Parties must
be determined by applying one or a combination of the following transfer pricing
methods:a) The comparable uncontrolled price method.
b) The resale price method.
c) The cost-plus method.
d) The transactional net margin method.
e) The transactional profit split method.
4. The Taxable Person may apply any transfer pricing method other than the methods listed

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in Clause 3 of this Article where the Taxable Person can demonstrate that none of theabove methods can be reasonably applied to determine an arm’s length result and thatany such other transfer pricing method used satisfies the condition of Clause 2 of this
Article.
5. The choice and application of a transfer pricing method or combination of transfer pricing
methods under Clause 3 or 4 of this Article must be made having regard to the mostreliable transfer pricing method and taking into account following factors:a) The contractual terms of the transaction or arrangement.
b) The characteristics of the transaction or arrangement.
c) The economic circumstances in which the transaction or arrangement is conducted.
d) The functions performed, assets employed, and risks assumed by the Related
Parties entering into the transaction or arrangement.
e) The business strategies employed by the Related Parties entering into thetransaction or arrangement.
6. The Authority’s examination as to whether income and expenditures resulting from theTaxable Person’s relevant transactions or arrangements meet the arm’s length standard
shall be based on the transfer pricing method used by the Taxable Person in accordancewith Clause 3 or 4 of this Article, provided such transfer pricing method is appropriate
having regard to the factors mentioned in Clause 5 of this Article.
7. Application of the selected transfer pricing method or combination of transfer pricing
methods in accordance with Clause 3 or 4 of this Article may result in an arm’s length
range of financial results or indicators acceptable for establishing the arm’s length resultof a transaction or arrangement between Related Parties, subject to any conditions
specified in a decision issued by the Authority.
8. Where the result of the transaction or arrangement between Related Parties does not
fall within the arm’s length range, the Authority shall adjust the Taxable Income toachieve the arm’s length result that best reflects the facts and circumstances of thetransaction or arrangement.
9. Where the Authority makes an adjustment to the Taxable Income pursuant to Clause 8of this Article, the Authority shall rely on information that can or will be made available
to the Taxable Person.
10. Where the Authority or a Taxable Person adjusts the Taxable Income for a transaction orFederal Decree-Law No. 47 of 2022 - Unofficial translation37

arrangement to meet the arm’s length standard, the Authority shall make acorresponding adjustment to the Taxable Income of the Related Party that is party to therelevant transaction or arrangement.
11. Where a foreign competent authority makes an adjustment to a transaction or
arrangement involving a Taxable Person to meet the arm’s length standard, such Taxable
Person can make an application to the Authority to make a corresponding adjustment to
its Taxable Income.
Article 35 – Related Parties and Control
1. For the purposes of this Decree-Law, “Related Parties” means any of the following:a) Two or more natural persons who are related within the fourth degree of kinshipor affiliation, including by way of adoption or guardianship.
b) A natural person and a juridical person where:
1. the natural person or one or more Related Parties of the natural person areshareholders in the juridical person, and the natural person, alone or
together with its Related Parties, directly or indirectly owns a 50% (fifty
percent) or greater ownership interest in the juridical person; or
2. the natural person, alone or together with its Related Parties, directly or
indirectly Controls the juridical person.
c) Two or more juridical persons where:
1. one juridical person, alone or together with its Related Parties, directly or
indirectly owns a 50% (fifty percent) or greater ownership interest in theother juridical person;
2. one juridical person, alone or together with its Related Parties, directly or
indirectly Controls the other juridical person; or
3. any Person, alone or together with its Related Parties, directly or indirectly
owns a 50% (fifty percent) or greater ownership interest in or Controls such
two or more juridical persons;d) A Person and its Permanent Establishment or Foreign Permanent Establishment.
e) Two or more Persons that are partners in the same Unincorporated Partnership.
f) A Person who is the trustee, founder, settlor or beneficiary of a trust or foundation,Federal Decree-Law No. 47 of 2022 - Unofficial translation

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and its Related Parties.
2. For the purposes of this Decree-Law, “Control” means the ability of a Person, whether intheir own right or by agreement or otherwise to influence another Person, including:a) The ability to exercise 50% (fifty percent) or more of the voting rights of another
Person.
b) The ability to determine the composition of 50% (fifty percent) or more of theBoard of directors of another Person.
c) The ability to receive 50% (fifty percent) or more of the profits of another Person.
d) The ability to determine, or exercise significant influence over, the conduct of theBusiness and affairs of another Person.
Article 36 – Payments to Connected Persons
1. Without prejudice to the provisions of Article 28 of this Decree-Law, a payment or benefit
provided by a Taxable Person to its Connected Person shall be deductible only if and to
the extent the payment or benefit corresponds with the Market Value of the service,
benefit or otherwise provided by the Connected Person and is incurred wholly andexclusively for the purposes of the Taxable Person’s Business.
2. For the purposes of this Decree-Law, a Person shall be considered a Connected Personof a Taxable Person if that Person is:a) An owner of the Taxable Person.
b) A director or officer of the Taxable Person.
c) A Related Party of any of the Persons referred to in paragraphs (a) and (b) of Clause
2 of this Article.
3. For the purposes of paragraph (a) of Clause 2 of this Article, an owner of the Taxable
Person is any natural person who directly or indirectly owns an ownership interest in the
Taxable Person or Controls such Taxable Person.
4. Where the Taxable Person is a partner in an Unincorporated Partnership, a Connected
Person is any other partner in that same Unincorporated Partnership, and any Personthat is a Related Party of that partner.
5. To determine that a payment or benefit provided by the Taxable Person correspondswith the Market Value of the service or otherwise provided by the Connected Person inFederal Decree-Law No. 47 of 2022 - Unofficial translation

39

exchange, the relevant provisions of Article 34 of this Decree-Law shall apply as thecontext requires.
6. Clause 1 of this Article shall not apply to any of the following:a) A Taxable Person whose shares are traded on a Recognised Stock Exchange.
b) A Taxable Person that is subject to the regulatory oversight of a competentauthority in the State.
c) Any other Person as may be determined in a decision issued by the Cabinet at thesuggestion of the Minister.
Chapter Eleven – Tax Loss Provisions
Article 37 – Tax Loss Relief
1. A Tax Loss can be offset against the Taxable Income of subsequent Tax Periods to arriveat the Taxable Income for those subsequent Tax Periods.
2. The amount of Tax Loss used to reduce the Taxable Income for any subsequent Tax
Period cannot exceed 75% (seventy-five percent) or any other percentage as specified ina decision issued by the Cabinet at the suggestion of the Minister of the Taxable Income
for that Tax Period before any Tax Loss relief, except in circumstances that may beprescribed in a decision issued by the Cabinet at the suggestion of the Minister.
3. A Taxable Person cannot claim Tax Loss relief for:a) Losses incurred before the date of commencement of Corporate Tax.
b) Losses incurred before a Person becomes a Taxable Person under this Decree-Law.
c) Losses incurred from an asset or activity the income of which is exempt, orotherwise not taken into account under this Decree-Law.
4. A Tax Loss carried forward to a subsequent Tax Period must be set off against the Taxable
Income of that subsequent Tax Period, before any remainder can be carried forward toa further subsequent Tax Period, or any Tax Loss transferred under Article 38 of thisDecree-Law can be utilised.
Article 38 – Transfer of Tax Loss
1. A Tax Loss or a portion thereof may be offset against the Taxable Income of anotherTaxable Person where all of the following conditions are met:

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40a) Both Taxable Persons are juridical persons.
b) Both Taxable Persons are Resident Persons.
c) Either Taxable Person has a direct or indirect ownership interest of at least 75%(seventy-five percent) in the other, or a third Person has a direct or indirectownership interest of at least 75% (seventy-five percent) in each of the Taxable
Persons.
d) The common ownership under paragraph (c) of Clause 1 of this Article must exist
from the start of the Tax Period in which the Tax Loss is incurred to the end of theTax Period in which the other Taxable Person offsets the Tax Loss transferredagainst its Taxable Income.
e) None of the Persons are an Exempt Person.
f) None of the Persons are a Qualifying Free Zone Person.
g) The Financial Year of each of the Taxable Persons ends on the same date.
h) Both Taxable Persons prepare their financial statements using the same accounting
standards.
2. Where a Taxable Person transfers its Tax Loss to another Taxable Person under Clause 1of this Article:a) the Taxable Person which the Tax Loss is transferred to shall reduce its Taxable
Income for the relevant Tax Period;b) the total Tax Loss offset shall not exceed the amount allowed under Clause 2 ofArticle 37 of this Decree-Law; andc) the Taxable Person shall reduce its available Tax Losses by the amount of the Tax
Loss transferred to the other Taxable Person for the relevant Tax Period.
Article 39 – Limitation on Tax Losses Carried Forward
1. Tax Losses can only be carried forward and utilised in accordance with the provision ofClause 2 of Article 37 of this Decree-Law provided that:a) From the beginning of the Tax Period in which the Tax Loss is incurred to the endof the Tax Period in which the Tax Loss or part thereof is offset against Taxable
Income of that period, the same Person or Persons continuously owned at least a
50% (fifty percent) ownership interest in the Taxable Person.

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41b) The Taxable Person continued to conduct the same or a similar Business or Business
Activity following a change in ownership of more than 50% (fifty percent).
2. For the purposes of paragraph (b) of Clause 1 of this Article, relevant factors fordetermining whether a Taxable Person has continued to conduct the same or a similar
Business or Business Activity following a change in the direct or indirect ownership
include:a) the Taxable Person uses some or all of the same assets as before the ownershipchange;b) the Taxable Person has not made significant changes to the core identity or
operations of its Business since the ownership change; andc) where there have been any changes, these result from the development or
exploitation of assets, services, processes, products or methods that existed before
the ownership change.
3. Clause 1 of this Article shall not apply to a Taxable Person whose shares are listed on a
Recognised Stock Exchange.
Chapter Twelve – Tax Group Provisions
Article 40 – Tax Group
1. A Resident Person, which for the purposes of this Decree-Law shall be referred to as a“Parent Company”, can make an application to the Authority to form a Tax Group with
one or more other Resident Persons, each referred to as a “Subsidiary” for the purposesof this Chapter, where all of the following conditions are met:a) The Resident Persons are juridical persons.
b) The Parent Company owns at least 95% (ninety-five percent) of the share capital of
the Subsidiary, either directly or indirectly through one or more Subsidiaries.
c) The Parent Company holds at least 95% (ninety-five percent) of the voting rights in
the Subsidiary, either directly or indirectly through one or more Subsidiaries.
d) The Parent Company is entitled to at least 95% (ninety-five percent) of theSubsidiary's profits and net assets, either directly or indirectly through one or more
Subsidiaries.
e) Neither the Parent Company nor the Subsidiary is an Exempt Person.

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42f) Neither the Parent Company nor the Subsidiary is a Qualifying Free Zone Person.
g) The Parent Company and the Subsidiary have the same Financial Year.
h) Both the Parent Company and the Subsidiary prepare their financial statements
using the same accounting standards.
2. Notwithstanding paragraph (e) of Clause 1 of this Article, one or more Subsidiaries inwhich a Government Entity directly or indirectly owns at least a 95% (ninety-five percent)ownership interest as specified in paragraphs (b), (c) and (d) of Clause 1 of this Article
can form a Tax Group, subject to the conditions to be prescribed by the Authority.
3. An application made under Clause 1 of this Article shall be made to the Authority by the
Parent Company and each Subsidiary seeking to become members of the Tax Group.
4. A Tax Group formed under Clause 1 of this Article is treated as a single Taxable Person
for the purposes of this Decree-Law, represented by the Parent Company.
5. The Parent Company shall comply with all obligations set out in Chapters Fourteen,
Sixteen and Seventeen of this Decree-Law on behalf of the Tax Group.
6. The Parent Company and each Subsidiary shall be jointly and severally liable for
Corporate Tax Payable by the Tax Group for those Tax Periods when they are membersof the Tax Group.
7. The joint and several liability under Clause 6 of this Article for a Tax Period can be limited
to one or more members of the Tax Group following approval by the Authority.
8. The Parent Company and each Subsidiary shall remain responsible for complying withthe provisions under Article 45 of this Decree-Law.
9. A Subsidiary can join an existing Tax Group following submission of an application to the
Authority by the Parent Company and the relevant Subsidiary.
10. A Subsidiary shall leave the Tax Group in the following circumstances:a) Following approval by the Authority of an application by the Parent Company andthe relevant Subsidiary.
b) Where the relevant Subsidiary no longer meets the conditions to be a member of
the Tax Group as specified in Clause 1 of this Article.
11. A Tax Group shall cease to exist in any of the following circumstances:

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43a) Following approval by the Authority of an application by the Parent Company.
b) Where the Parent Company no longer meets the conditions to form a Tax Group as
specified in Clause 1 of this Article, subject to the provisions of Clause 12 of this
Article.
12. The Parent Company of a Tax Group can make an application to the Authority to be
replaced by another Parent Company without a discontinuation of the Tax Group, in anyof the following circumstances.
a) The new Parent Company meets the conditions under Clause 1 of this Article
relating to the former Parent Company.
b) The former Parent Company ceases to exist and the new Parent Company or a
Subsidiary is its universal legal successor.
13. Notwithstanding Clauses 11 and 12 of this Article, the Authority may, at its discretion,
dissolve a Tax Group or change the Parent Company of a Tax Group based on information
available to the Authority, and notify the Parent Company of such action taken.
Article 41 – Date of Formation and Cessation of a Tax Group
1. For the purposes of Article 40 of this Decree-Law, a Tax Group shall be formed, or a new
Subsidiary shall join an existing Tax Group from the beginning of the Tax Period specified
in the application submitted to the Authority, or from the beginning of any other Tax
Period determined by the Authority.
2. For the purposes of paragraph (a) of Clause 10 of Article 40 and paragraph (a) of Clause
11 of Article 40 of this Decree-Law, the relevant member of a Tax Group shall be treatedas leaving that Tax Group from the beginning of the Tax Period specified in theapplication submitted to the Authority, or from the beginning of any other Tax Period
determined by the Authority.
3. For the purposes of paragraph (b) of Clause 10 of Article 40 and paragraph (b) of Clause
11 of Article 40 of this Decree-Law, the relevant member of a Tax Group shall be treatedas leaving that Tax Group from the beginning of the Tax Period in which the conditions
under Clause 1 of Article 40 of this Decree-Law are no longer met.
Article 42 – Taxable Income of a Tax Group
1. For the purposes of determining the Taxable Income of a Tax Group, the Parent Company
shall consolidate the financial results, assets and liabilities of each Subsidiary for the
relevant Tax Period, eliminating transactions between the Parent Company and eachFederal Decree-Law No. 47 of 2022 - Unofficial translation

44

Subsidiary that is a member of the Tax Group.
2. The relevant provisions of this Decree-Law shall apply as the context requires to the Tax
Group.
3. Unutilised Tax Losses of a Subsidiary that joins a Tax Group (referred to in this Article as“pre-Grouping Tax Losses”) shall become carried forward Tax Losses of the Tax Group,and can be used to offset the Taxable Income of the Tax Group insofar this income isattributable to the relevant Subsidiary.
4. Where a new Subsidiary joins an existing Tax Group, unutilised Tax Losses of the existingTax Group cannot be used to offset the Taxable Income of the Tax Group insofar thisincome is attributable to the new Subsidiary.
5. The application of Clauses 3 and 4 of this Article is subject to the conditions of Articles 37
and 39 of this Decree-Law.
6. Where a Subsidiary leaves a Tax Group, Tax Losses of the Tax Group shall remain with
the Tax Group, with the exception of any unutilised pre-Grouping Tax Losses of therelevant Subsidiary.
7. On cessation of a Tax Group, unutilised Tax Losses of the Tax Group shall be allocated asfollows:a) Where the Parent Company continues to be a Taxable Person, all Tax Losses shallremain with the Parent Company.
b) Where the Parent Company ceases to be a Taxable Person, Tax Losses of the Tax
Group shall not be available for offset against future Taxable Income of individual
Subsidiaries, with the exception of any unutilised pre-Grouping Tax Losses of such
Subsidiaries.
8. Paragraph (b) of Clause 7 of this Article shall not apply where there is a continuation of
the Tax Group under Clause 12 of Article 40 of this Decree-Law.
9. Clause 1 of this Article shall not apply where an asset or liability has been transferred
between members of the Tax Group and either the transferor or transferee leaves theTax Group within (2) two years from the date of the transfer, unless the associatedincome would have been exempt from Corporate Tax or not taken into account under
any other provisions of this Decree-Law.
10. Any income that was not taken into account with regards to a transfer described in Clause
9 of this Article shall be taken into account on the date the transferor or transferee leaves

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the Tax Group, and shall result in a corresponding adjustment of the cost base for
Corporate Tax purposes of the relevant asset or liability.
11. The Tax Group must prepare consolidated financial statements in accordance withaccounting standards applied in the State.
Chapter Thirteen – Calculation of Corporate Tax Payable
Article 43 – Currency
For the purposes of this Decree-Law, all amounts must be quantified in the United ArabEmirates dirham. Any amount quantified in another currency must be converted at theapplicable exchange rate set by the Central Bank of the United Arab Emirates, subject to any
conditions that may be prescribed in a decision issued by the Authority.
Article 44 – Calculation and Settlement of Corporate Tax
The Corporate Tax due under this Decree-Law is settled in the following order:
1. First, by using the Taxable Person’s available Withholding Tax Credit, as determined
under Article 46 of this Decree-Law.
2. To the extent there is a residual amount after Clause 1 of this Article, by using the Taxable
Person’s available Foreign Tax Credit as determined under Article 47 of this Decree-Law.
3. To the extent there is a residual amount after Clause 2 of this Article, by using any credits
or other forms of relief as specified in a decision issued by the Cabinet at the suggestionof the Minister.
4. To the extent there is a residual amount after Clause 3 of this Article, this amount ofCorporate Tax Payable must be settled in accordance with Article 48 of this Decree-Law.
Article 45 – Withholding Tax
1. The following income shall be subject to Withholding Tax at the rate of 0% (zero percent)or any other rate as specified in a decision issued by the Cabinet at the suggestion of the
Minister:a) The categories of State Sourced Income derived by a Non-Resident Person asprescribed in the decision issued by the Cabinet pursuant to this Article, insofar
such income is not attributable to a Permanent Establishment of the Non-Resident
Person in the State.
b) Any other income as specified in a decision issued by the Cabinet at the suggestionof the Minister.

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2. The Withholding Tax payable under Clause 1 of this Article shall be deducted from thegross amount of the payment and remitted to the Authority in the form and manner andwithin the timeline prescribed by the Authority.
Article 46 – Withholding Tax Credit
1. If a Person becomes a Taxable Person in a Tax Period, the Person’s Corporate Tax due
under Article 3 of this Decree-Law can be reduced by the amount of Withholding Tax
Credit for that Tax Period.
2. The maximum Withholding Tax Credit under this Decree-Law is the lower of:a) The amount of Withholding Tax deducted under Clause 2 of Article 45 of thisDecree-Law.
b) The Corporate Tax due under this Decree-Law.
3. Any excess Withholding Tax Credit for a Tax Period as a result of Clause 2 of this Article
shall be refunded to the Taxable Person in accordance with Article 49 of this Decree-Law.
Article 47 – Foreign Tax Credit
1. Corporate Tax due under Article 3 of this Decree-Law can be reduced by the amount of
Foreign Tax Credit for the relevant Tax Period.
2. The Foreign Tax Credit under this Decree-Law cannot exceed the amount of Corporate
Tax due on the relevant income.
3. Any unutilised Foreign Tax Credit as a result of Clause 2 of this Article cannot be carriedforward or carried back.
4. A Taxable Person shall maintain all necessary records for the purposes of claiming a
Foreign Tax Credit.
Chapter Fourteen – Payment and Refund of Corporate Tax
Article 48 – Corporate Tax Payment
A Taxable Person must settle the Corporate Tax Payable under this Decree-Law within (9) ninemonths from the end of the relevant Tax Period, or by such other date as determined by the
Authority.
Article 49 – Corporate Tax Refund
1. A Taxable Person may make an application to the Authority for a Corporate Tax refundFederal Decree-Law No. 47 of 2022 - Unofficial translation47

in accordance with the provisions of the Tax Procedures Law in the following
circumstances:a) The Withholding Tax Credit available to a Taxable Person exceeds the Taxable
Person’s Corporate Tax Payable.
b) Where the Authority is otherwise satisfied that the Taxable Person has paid
Corporate Tax in excess of the Taxable Person’s Corporate Tax Payable.
2. The Authority shall issue the Taxable Person a notice of the Authority’s decision on an
application under Clause 1 of this Article in accordance with the Tax Procedures Law.
Chapter Fifteen – Anti-Abuse Rules
Article 50 – General anti-abuse rule
1. This Article applies to a transaction or an arrangement if, having regard to all relevant
circumstances, it can be reasonably concluded that:a) the entering into or carrying out of the transaction or arrangement, or any part ofit, is not for a valid commercial or other non-fiscal reason which reflects economic
reality; andb) the main purpose or one of the main purposes of the transaction or arrangement,or any part of it, is to obtain a Corporate Tax advantage that is not consistent with
the intention or purpose of this Decree-Law.
2. For the purposes of this Article, a Corporate Tax advantage includes, but is not limited to
the following:a) A refund or an increased refund of Corporate Tax.
b) Avoidance or reduction of Corporate Tax Payable.
c) Deferral of a payment of Corporate Tax or advancement of a refund of Corporate
Tax.
d) Avoidance of an obligation to deduct or account for Corporate Tax.
3. Where the provisions of this Article apply to a transaction or arrangement, the Authority
may make a determination that one or more specified Corporate Tax advantages
obtained as a result of the transaction or arrangement are to be counteracted or
adjusted.
4. If a determination is made under Clause 3 of this Article, the Authority must issue an

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assessment giving effect to the determination, which may include:a) allowing or disallowing any exemption, deduction or relief in calculating theTaxable Income or the Corporate Tax Payable, or any part thereof;b) allocating any such exemption, deduction or relief, or any part thereof, to any other
Persons;c) recharacterising for the purposes of this Decree-Law the nature of any payment orother amount, or any part thereof; ord) disregarding the effect that would otherwise result from the application of otherprovisions of this Decree-Law,and can make compensating adjustments to the Corporate Tax liability of any other
Person affected by the determination made by the Authority.
5. For the purpose of determining whether this Article applies to a transaction or
arrangement, the following must be considered:a) The manner in which the transaction or arrangement was entered into or carriedout.
b) The form and substance of the transaction or arrangement.
c) The timing of the transaction or arrangement.
d) The result of the transaction or arrangement in relation to the application of thisDecree-Law.
e) Any change in the financial position of the Taxable Person that has resulted, will
result, or may reasonably be expected to result, from the transaction or
arrangement.
f) Any change in the financial position of another Person that has resulted, will result,or may reasonably be expected to result, from the transaction or arrangement.
g) Whether the transaction or arrangement has created rights or obligations which
would not normally be created between Persons dealing with each other at arm’s
length in respect of the relevant transaction or arrangement.
h) Any other relevant information and circumstances.
6. In any proceeding concerning the application of this Article, the Authority must

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demonstrate that the determination made under Clause 3 of this Article is just andreasonable.
Chapter Sixteen – Tax Registration and Deregistration
Article 51 – Tax Registration
1. Any Taxable Person shall register for Corporate Tax with the Authority in the form andmanner and within the timeline prescribed by the Authority and obtain a Tax Registration
Number, except in circumstances prescribed by the Minister.
2. For the purposes of an exemption from Corporate Tax under this Decree-Law or for
purposes of Clause 6 of Article 53 of this Decree-Law, the Authority may require therelevant Person under paragraphs (e), (f), (g), (h) and (i) of Clause 1 of Article 4 of thisDecree-Law, or the Unincorporated Partnership, as applicable, to register for Corporate
Tax and obtain a Tax Registration Number.
3. The Authority shall, at its discretion and based on information available to the Authority,
have the ability to register a Person for Corporate Tax effective from the date the Person
became a Taxable Person.
Article 52 – Tax Deregistration
1. A Person with a Tax Registration Number shall file a Tax Deregistration application with
the Authority where there is a cessation of its Business or Business Activity, whether by
dissolution, liquidation, or otherwise, in the form and manner and within the timeline
prescribed by the Authority.
2. A Taxable Person shall not be deregistered unless it has paid all Corporate Tax and
Administrative Penalties due and filed all Tax Returns due under this Decree-Law,
including its Tax Return for the Tax Period up to and including the date of cessation.
3. If the Tax Deregistration application is approved, the Authority shall deregister the
Person for Corporate Tax purposes with effect from the date of cessation or from suchother date as may be determined by the Authority.
4. Where a Person does not comply with the Tax Deregistration requirements under this
Article, the Authority may, at its discretion and based on information available to the
Authority, deregister the Taxable Person effective from the later of either:a) the last day of the Tax Period in which it became apparent to the Authority that theconditions under Clause 2 of this Article have been met; orb) the date the Taxable Person ceases to exist.

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Chapter Seventeen – Tax Returns and Clarifications
Article 53 – Tax Returns
1. Subject to Article 51 of this Decree-Law, a Taxable Person must file a Tax Return, as
applicable, to the Authority in the form and manner prescribed by the Authority no later
than (9) nine months from the end of the relevant Tax Period, or by such other date as
directed by the Authority.
2. The Tax Return shall include at least the following information, as applicable:a) The Tax Period to which the Tax Return relates.
b) The name, address and Tax Registration Number of the Taxable Person.
c) The date of submission of the Tax Return.
d) The accounting basis used in the financial statements.
e) The Taxable Income for the Tax Period.
f) The amount of Tax Loss relief claimed under Clause 1 of Article 37 of this DecreeLaw.
g) The amount of Tax Loss transferred under Article 38 of this Decree-Law.
h) The available tax credits claimed under Articles 46 and 47 of this Decree-Law.
i) The Corporate Tax Payable for the Tax Period.
3. A Taxable Person shall provide the Authority with any such information, documents orrecords as shall be reasonably required by the Authority for the purposes of
implementing the provisions of this Decree-Law.
4. As an exception to the provisions of this Article and any other relevant provision of thisDecree-Law, the Minister may prescribe the form and manner in which a Tax Return andother information is to be filed with the Authority by a Taxable Person where thedisclosure of information may impede national security or may be contrary to the public
interest.
5. The Authority may request a Person under paragraphs (e), (f), (g), (h) and (i) of Clause 1of Article 4 of this Decree-Law to submit a declaration.
6. The Authority may, by notice or through a decision issued by the Authority, request theauthorised partner in an Unincorporated Partnership that has not had an application

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approved under Clause 8 of Article 16 of this Decree-Law to be treated as a Taxable
Person to file a declaration on behalf of all the partners in the Unincorporated
Partnership.
7. The Parent Company must file a Tax Return to the Authority on behalf of the Tax Group.
Article 54 – Financial Statements
1. The Authority may, by notice or through a decision issued by the Authority, request a
Taxable Person to submit the financial statements used to determine the Taxable Income
for a Tax Period in the form and manner and within the timeline prescribed by the
Authority.
2. The Minister may issue a decision requiring categories of Taxable Persons to prepare andmaintain audited or certified financial statements.
3. For the purposes of Clause 1 of this Article, the Authority may request a partner in an
Unincorporated Partnership to provide financial statements showing all of the following:a) The total assets, liabilities, income and expenditure of the Unincorporated
Partnership.
b) The partner’s distributive share in the Unincorporated Partnership’s assets,
liabilities, income and expenditure.
Article 55 – Transfer Pricing Documentation
1. The Authority may, by notice or through a decision issued by the Authority, require a
Taxable Person to file together with their Tax Return a disclosure containing information
regarding the Taxable Person’s transactions and arrangements with its Related Parties
and Connected Persons in the form prescribed by the Authority.
2. If a Taxable Person’s transactions with its Related Parties and Connected Persons for aTax Period meet the conditions prescribed by the Minister, the Taxable Person must
maintain both a master file and a local file in the form prescribed by the Authority.
3. The documentation under Clause 2 of this Article must be submitted to the Authority
within (30) thirty days following a request by the Authority, or by any such other later
date as directed by the Authority.
4. Upon request by the Authority, a Taxable Person shall provide the Authority with any
information to support the arm’s length nature of the Taxable Person’s transactions or
arrangements with its Related Parties and Connected Persons, within (30) thirty days
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Authority.
Article 56 – Record Keeping
1. Notwithstanding the provisions of the Tax Procedures Law, a Taxable Person shallmaintain all records and documents for a period of (7) seven years following the end of
the Tax Period to which they relate that:a) Support the information to be provided in a Tax Return or in any other document
to be filed with the Authority.
b) Enable the Taxable Person’s Taxable Income to be readily ascertained by the
Authority.
2. Notwithstanding the provisions of the Tax Procedures Law, an Exempt Person shallmaintain all records that enable the Exempt Person’s status to be readily ascertained by
the Authority for a period of (7) seven years following the end of the Tax Period to which
they relate.
Article 57 – Tax Period
1. A Taxable Person’s Tax Period is the Financial Year or part thereof for which a Tax Returnis required to be filed.
2. For the purposes of this Decree-Law, the Financial Year of a Taxable Person shall be theGregorian calendar year, or the (12) twelve-month period for which the Taxable Person
prepares financial statements.
Article 58 – Change of Tax Period
Notwithstanding Article 57 of this Decree-Law, a Taxable Person can make an application to
the Authority to change the start and end date of its Tax Period, or use a different Tax Period,
subject to conditions to be set by the Authority.
Article 59 – Clarifications
1. A Person may make an application to the Authority for a clarification regarding theapplication of this Decree-Law or the conclusion of an advance pricing agreement withrespect to a transaction or an arrangement proposed or entered into by the Person.
2. The application under Clause 1 of this Article shall be made in the form and mannerprescribed by the Authority.

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Chapter Eighteen – Violations and Penalties
Article 60 – Assessment of Corporate Tax and penalties
1. A Person may be subject to a Corporate Tax assessment in accordance with the Tax
Procedures Law and the decisions issued in the implementation of its provisions.
2. Notwithstanding the provisions of the Tax Procedures Law and the decisions issued in
the implementation of its provisions, the Authority may prescribe the circumstances andconditions under which a Corporate Tax assessment may be requested by a Taxable
Person or issued by the Authority.
3. The Tax Procedures Law referred to in the preamble and the decisions issued in theimplementation of its provisions shall determine the relevant penalties and fines
relevant to the implementation of this Decree-Law.
Chapter Nineteen – Transitional Rules
Article 61 – Transitional Rules
1. A Taxable Person’s opening balance sheet for Corporate Tax purposes shall be the closingbalance sheet prepared for financial reporting purposes under accounting standards
applied in the State on the last day of the Financial Year that ends immediately before
their first Tax Period commences, subject to any conditions or adjustments that may beprescribed by the Minister.
2. The opening balance sheet referred to in Clause 1 of this Article shall be prepared taking
into consideration the arm’s length principle in accordance with Article 34 of this DecreeLaw.
3. For the purposes of Clauses 1 and 2 of this Article, and as an exception to the provisionsof Article 70 of this Decree-Law, the provisions of Article 50 of this Decree-Law shall apply
to transactions or arrangements entered into on or after the date this Decree-Law ispublished in the Official Gazette.
4. The Cabinet may, at the suggestion of the Minister, issue a decision prescribing othertransitional measures related to the implementation of this Decree-Law and theapplication of its provisions.
Chapter Twenty – Closing provisions
Article 62 – Delegation of Power
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Authority, where the Minister deems appropriate.
Article 63 – Administrative Policies and Procedures
The administrative policies, procedures and general instructions in relation to therequirements imposed on a Person under this Decree-Law shall be issued by the Authority incoordination with the Ministry.
Article 64 – Cooperating with the Authority
All governmental authorities in the State shall fully cooperate with the Authority to carry out
whatever is required to implement the provisions of this Decree-Law and provide theAuthority with any data, information and documentation in respect of a Taxable Person or an
Exempt Person as may be requested by the Authority.
Article 65 – Revenue Sharing
Corporate Tax revenues and Administrative Penalties collected under this Decree-Law shallbe subject to sharing between the Federal Government and the Local Governments based on
the provisions of a federal law issued in this regard.
Article 66 – International Agreements
To the extent the terms of an international agreement that is in force in the State areinconsistent with the provisions of this Decree-Law, the terms of the international agreement
shall prevail.
Article 67 – Implementing Decisions
1. Subject to the powers conferred to the Cabinet under this Decree-Law, the Minister andthe Authority shall issue the necessary decisions, within their respective powers, toimplement the provisions of this Decree-Law.
2. The Cabinet may, at the suggestion of the Minister, issue implementing decisions for thisDecree-Law.
Article 68 – Cancellation of Conflicting Provisions
Any text or provisions contrary to or inconsistent with the provisions of this Decree-Law shallbe abrogated.
Article 69 – Application of this Decree-Law to Tax Periods
This Decree-Law shall apply to Tax Periods commencing on or after 1 June 2023.

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Article 70 – Publication and Application of this Decree-Law
This Decree-Law shall be published in the Official Gazette and shall come into effect (15)fifteen days following the date of publication.

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