Dubai: A business going through a liquidation or terminal will be exempt from UAE Corporate Tax obligations. But these businesses will need to submit a notification to the federal tax Authority within 20 business days from the date of the liquidation process being launched.
The business owner is also expected to rectify the failure to meet the conditions within those 20 business days from the submission of the application. This period may be extended by an additional 20 business days if the failure to rectify is beyond the person's reasonable control.
The latest Ministry of Finance decision clarifies rules to ensure that businesses remain eligible for a corporate tax exemption if they fail to meet the relevant exemption conditions under certain circumstances.
Additionally, the Ministerial decision addresses cases where a business no longer meets exemption conditions primarily to gain a corporate tax advantage. In such cases, the business will cease to be considered exempt on the date it no longer fulfils the exemption conditions.
This was confirmed as a UAE Ministry of Finance Decision No. (105) of 2023 on determination of conditions under which a ‘person may continue or cease to be deemed an exempt person’.
"The Ministerial Decision clarifies the conditions under which a person may continue or cease to be an exempt person from a different date as a result of an event that goes beyond the person's control and could not have been reasonably foreseen or prevented," said Younis Haji Al Khouri, Undersecretary of the Ministry of Finance.