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Federal Decree by Law Concerning Corporate and Business Tax
Federal Decree by Law Concerning Corporate and Business Tax

The last update on this law was listed on 01 Oct 2025

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Issued Date

03 Oct 2022

Effective Date

25 Oct 2022

Official Gazette Date

10 Oct 2022

Official Gazette No

737 (ملحق)

Legislation State

Active

Legislation Amendments

3

Disclaimer: Every effort has been made to produce an accurate and complete English version of this website/ legislation. However, for the purpose of their interpretation and application, reference must be made to the original Arabic text. In case of conflict, the Arabic text will prevail

Index
Index
Chapter One: General provisions
Article (1) Definitions
Chapter Two: Imposition of Corporate Tax and Applicable Rates
Article (2) Imposition of Corporate Tax
Article (3) Corporate Tax Rate
Chapter Three: Exempt Person
Article (4) Exempt Person
Article (5) Government Entity
Article (6) Government Controlled Entity
Article (7) Extractive Business
Article (8) Non-Extractive Natural Resource Business
Article (9) Qualifying Public Benefit Entity
Article (10) Qualifying Mutual Fund
Chapter Four: Taxable Person and Corporate Tax Base
Article (11) Taxable Person
Article (12) Corporate Tax Base
Article (13) State Sourced Income
Article (14) Permanent Establishment
Article (15) Investment Manager Exemption
Article (16) Partners in an Unincorporated Association
Article (17) Family Foundation
Chapter Five: Free Zone Person
Article (18) Qualifying Free Zone Person
Article (19) Election to be Subject to Corporate Tax
Chapter Six: Calculating Taxable Income
Article (20) General Rules for Determining Taxable Income
Article (21) Small Business Relief
Chapter Seven: Exempt Income
Article (22) Exempt Income
Article (23) Participation Exemption
Article (24) Foreign Permanent Establishment Exemption
Article (25) Non-Resident Person Operating Aircraft or Ships in International Transportation
Chapter Eight: Reliefs
Article (26) Transfers Within a Qualifying Group
Article (27) Business Restructuring Relief
Chapter Nine: Deductions
Article (28) Deductible Expenses
Article (29) Interest Expense
Article (30) General Interest Deduction Limitation Rule
Article (31) Special Interest Deduction Limitation Rule
Article (32) Entertainment Expenses
Article (33) Non-deductible Expenses
Chapter Ten: Transactions with Related Parties and Connected Persons
Article (34) Arm's Length Principle
Article (35) Related Parties and Controls
Article (36) Payments to Connected Persons
Chapter Eleven: Tax Loss Provisions
Article (37) Tax Loss Relief
Article (38) Transfer of Tax Loss
Article (39) Limitation on Tax Losses Carryforward
Chapter Twelve: Tax Group Provisions
Article (40) Tax Group
Article (41) Date of Formation and Cessation of a Tax Group
Article (42) Taxable Income of a Tax Group
Chapter Thirteen: Calculation of Corporate Tax Payable
Article (43) Currency
Article (44) Calculation and Payment of Corporate Tax
Article (45) Withholding Tax
Article (46) Withholding Tax Credit
Article (47) Foreign Tax Credit
Chapter Fourteen: Payment and Refund of Corporate Tax
Article (48) Corporate Tax Payment
Article (49) Corporate Tax Refund
Article (49) BIS Claiming Unused Tax Credit
Chapter Fifteen: Anti-Abuse Rules
Article (50) General Anti-abuse Rule
Chapter Sixteen: Tax Registration and Deregistration
Article (51)Tax Registration
Article (52) Tax Deregistration
Chapter Seventeen: Tax Returns and Clarifications
Article (53) Tax Returns
Article (54) Financial Statements
Article (55) Transfer Pricing Documentation
Article (56) Record Keeping
Article (57) Tax Period
Article (58) Change of Tax Period
Article (59) Clarifications
Chapter Eighteen: Violations and Penalties
Article (60) Assessment of Corporate Tax and Fines
Chapter Nineteen: Transitional Rules
Article (61) Transitional Rules
Chapter Twenty: Closing provisions
Article (62) Delegation of Power
Article (63) Administrative Policies and Procedures
Article (64) Cooperating with the Authority
Article (65) Revenue Sharing
Article (66) International Agreements
Article (67) Implementing Decisions
Article (68) Repeals
Article (69) Application of this Decree-Law to Tax Periods
Article (70) Publication and Entry into Force of this Decree-Law
Federal Decree by Law No. (47) of 2022 Concerning Corporate and Business Tax

We Mohamed bin Zayed Al Nahyan, President of the United Arab Emirates,
- Having reviewed the Constitution;
- Federal Law No. 1 of 1972 on the Competencies of Ministries and the Powers of Ministers, as amended;
- Federal Law No. 26 of 1981 on the Commercial Maritime Law, as amended;
- Federal Law No. 5 of 1985 promulgating the Civil Code, as amended;
- Federal Law No. 18 of 1993 promulgating the Commercial Transactions Law, as amended;
- Federal Law No. 4 of 2000 on the Emirates Securities and Commodities Authority and Market, as amended;
- Federal Law No. 8 of 2004 on the Financial Free Zones;
- Federal Law No. 6 of 2007 Regulating the Insurance Business, as amended;
- Federal Law No. 2 of 2008 on NGOs and Foundations, as amended;
- Federal Law No. 8 of 2011 on the Reorganization 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 Regulating the Auditing Profession, as amended;
- Federal Decree-Law No. 9 of 2016 on Bankruptcy, as amended;
- Federal Decree-Law No. 13 of 2016 on the Establishment of the Federal Tax Authority, as amended;
- Federal Decree-Law No. 7 of 2017 on Excise Tax, as amended;
- Federal Law No. 7 of 2017 on Tax Procedures, as amended;
- Federal Decree-Law No. 8 of 2017 on Value Added Tax, as amended;
- Federal Decree-Law No. 14 of 2018 on the Central Bank and Organization of Financial Institutions and Activities, as amended;
- 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, as amended;
- 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. 35 of 2022 promulgating the Law of Evidence in Civil and Commercial Transactions; and
- Pursuant to what was presented by the Minister of Finance and approved by the Cabinet,
We enacted the following Decree Law:

Chapter One: General provisions
Article (1) Definitions

In the application of the provisions of this Decree-Law, the following words and expressions shall have meanings assigned against each, unless the context otherwise requires:
State: United Arab Emirates.
Federal Government: The government of the United Arab Emirates.
Local Government: Any of the governments of the Member Emirates of the Federation.
Ministry: Ministry of Finance.
Minister: Minister of Finance.
Authority: Federal Tax Authority.
Corporate Tax: The tax imposed by this Decree-Law on juridical persons and Business income.
Business: Any activity conducted regularly, on an ongoing and independent basis by any Person and in any location, such as industrial, commercial, agricultural, vocational, professional, service or excavation activities or any other activity related to the use of tangible or intangible properties.
Qualifying Income: Any income derived by a Qualifying Free Zone Person that is subject to Corporate Tax at the rate specified in paragraph (a) of Clause (2) of Article (3) of this Decree-Law.
Government Entity: The Federal Government, Local Governments, ministries, government departments, government agencies, authorities and public institutions of the Federal Government or Local Governments.
Government Controlled Entity: Any juridical person, directly or indirectly wholly owned and controlled by a Government Entity, as specified in a resolution issued by the Cabinet at the suggestion of the Minister.
Person: Any natural person or juridical person.
Business Activity: Any transaction or activity, or series of transactions or series of activities conducted by a Person in the course of its Business.
Mandated Activity: Any activity conducted by a Government Controlled Entity in accordance with the legal instrument establishing or regulating the entity, that is specified in a resolution issued by the Cabinet at the suggestion of the Minister.
State's Territory: The State's lands, territorial sea and airspace above it.
Natural Resources: Water, oil, gas, coal, naturally formed minerals, and other non-renewable, non-living natural resources that may be extracted from the State's Territory.
Extractive Business: The Business or Business Activity of exploring, extracting, removing, or otherwise producing and exploiting the Natural Resources of the State or any interest therein as determined by the Minister.
Non-Extractive Natural Resource Business: The Business or Business Activity of separating, treating, refining, processing, storing, transporting, marketing or distributing the Natural Resources of the State.
Qualifying Public Benefit Entity: Any entity that meets the conditions set out in Article (9) of this Decree-Law and that is listed in a resolution issued by the Cabinet at the suggestion of the Minister.
Qualifying Mutual Fund: Any entity whose principal activity is the issuing of investment interests to raise funds or pool investor funds or establish a joint mutual fund with the aim of enabling the holder of such an investment interest to benefit from the profits or gains from the entity's acquisition, holding, management or disposal of investments, in accordance with the applicable legislation and when it meets the conditions set out in Article (10) of this Decree-Law.
Exempt Person: A Person exempt from Corporate Tax under Article (4) of this Decree-Law.
Taxable Person: A Person subject to Corporate Tax in the State under this Decree-Law.
Licensing Authority: The competent authority concerned with licensing or authorizing a Business or Business Activity in the State.
License: A document issued by a Licensing Authority under which a Business or Business Activity is conducted in the State.
Taxable Income: The income that is subject to Corporate Tax under this Decree-Law.
Fiscal Year: The period specified in Article (57) of this Decree-Law.
Tax Return: Information filed with the Authority for Corporate Tax purposes in the form and manner as prescribed by the Authority, including any schedule or attachment thereto, and any amendment thereof.
Tax Period: The period for which a Tax Return is required to be filed.
Related Party: Any Person associated with a Taxable Person as determined in Clause (1) of Article (35) of this Decree-Law.
Revenue: The gross amount of income derived during a Tax Period.
Recognized Stock Exchange: Any stock exchange established in the State that is licensed and regulated by the relevant competent authority, or any stock exchange established outside the State of equal standing.
Resident Person: The Taxable Person specified in Clause (3) of Article (11) of this Decree-Law.
Non-Resident Person: The Taxable Person specified in Clause (4) of Article (11) of this Decree-Law.
Free Zone: A designated and defined geographic area within the State that is specified in a decision issued by the Cabinet at the suggestion of the Minister.
Free Zone Person: A juridical person incorporated, established or otherwise registered in a Free Zone, including a branch of a Non-Resident Person registered in a Free Zone.
Unincorporated Association: A relationship established under a contract between two or more Persons, such as a partnership or trust or any other similar association of Persons, in accordance with the applicable legislation of the State.
Permanent Establishment: A place of Business or other form of presence in the State of a Non-Resident Person in accordance with Article (14) of this Decree-Law.
State Sourced Income: Income accruing in, or derived from, the State as specified in Article (13) of this Decree-Law.
Qualifying Free Zone Person: A Free Zone Person that meets the conditions of Article (18) of this Decree-Law and is subject to Corporate Tax under Clause (2) of Article (3) of this Decree-Law.
Investment Manager: A Person who provides brokerage or investment management services that is subject to the regulatory oversight of the competent authority in the State.
Corporate Tax Payable: Corporate Tax that has or will become due for payment to the Authority in respect of one or more Tax Periods.
Foreign Partnership: A relationship established by contract between two or more Persons, such as a partnership or trust or any other similar association of Persons, in accordance with laws of a foreign jurisdiction.
Foreign Tax Credit: Tax paid under the laws of a foreign jurisdiction on income or profits that may be deducted from the Corporate Tax due, in accordance with the conditions of Clause (2) of Article (47) of this Decree-Law.
Family Foundation: Any foundation, trust or similar entity that meets the conditions of Article (17) of this Decree-Law.
Interest: Any amount accrued or paid for the use of money or credit, including discounts, premiums and profit paid in respect of an Islamic financial instrument and other payments economically equivalent to interest, and any other amounts incurred in connection with the raising of finance, excluding payments of the principal amount.
Accounting Income: The accounting net profit or loss for the relevant Tax Period as per the financial statements prepared in accordance with the provisions of Article (20) of this Decree-Law.
Exempt Income: Any income exempt from Corporate Tax under this Decree-Law.
Connected Person: Any Person affiliated with a Taxable Person as determined in Clause (2) of Article (36) of this Decree-Law.
Tax Loss: Any negative Taxable Income as calculated under this Decree-Law for a given Tax Period.
Qualified Business Activity: Any activity that is specified in a decision issued by the Cabinet at the suggestion of the Minister.
Foreign Permanent Establishment: A place of Business or other form of presence outside the State of a Resident Person that is determined in accordance with the criteria prescribed in Article (14) of this Decree-Law.
Market Value: The price which could be agreed in an arm's-length free market transaction between Persons who are not Related Parties or Connected Persons in similar circumstances.
Qualifying Group: Two or more Taxable Persons that meet the conditions of Clause (2) of Article (26) of this Decree-Law.
Net Interest Expense: Interest expense minus interest income as determined in accordance with the provisions of this Decree-Law.
Bank: A Person licensed in the State as a bank or finance institution or an equivalent licensed activity that allows the taking of deposits and the granting of credits as defined in the applicable legislation of the State.
Insurer: A Person licensed in the State as an Insurer that accepts risks by entering into or carrying out contracts of insurance, in both the life and non-life sectors, including contracts of reinsurance and captive insurance, as defined in the applicable legislation of the State.
Control: The direction and influence over one Person by another Person in accordance with the conditions of Clause (2) of Article (35) of this Decree-Law
Tax Group: Two or more Taxable Persons treated as a single Taxable Person according to the conditions of Article (40) of this Decree-Law.
Withholding Tax Credit: The Corporate Tax amount that can be deducted from the Corporate Tax due in accordance with the conditions of Clause (2) of Article (46) of this Decree-Law.
Withholding Tax: Corporate Tax to be withheld from State Sourced Income in accordance with Article (45) of this Decree-Law.
Tax Registration: A procedure under which a Person registers for Corporate Tax purposes with the Authority.
Tax Registration Number: A unique number issued by the Authority to each Person who is registered for Corporate Tax purposes in the State.
Tax Deregistration: A procedure under which a Person is deregistered for Corporate Tax purposes with the Authority.
Tax Procedures Law: The federal law that governs tax procedures in the State.
Administrative Fines: Amounts imposed and collected under this Decree-Law or the Tax Procedures Law.
Supplementary Tax: The supplementary tax to be imposed on multinational enterprises in accordance with this Decree-Law and the rules and regulations determined by the Cabinet in accordance with Article (3) of this Decree-Law, for the purposes of the Pillar Two Rules issued by the Organization for Economic Cooperation and Development.
Multinational Enterprise: it is an entity and/or one or more of its member entities located in the State or in a foreign territory, as determined by a resolution to be issued by the Cabinet based on the proposal of the Minister.

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 this Decree-Law, and is 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 amount specified by virtue of a resolution to be issued by the Cabinet at the suggestion of the Minister.
b. 9% (nine percent) on Taxable Income that exceeds the amount specified by virtue of a resolution to be resolution issued by the Cabinet at the suggestion of the Minister.
2. Corporate Tax shall be imposed on a Qualifying Free Zone Person at the following rates:
a. 0% (zero percent) on Qualifying Income.
b. 9% (nine percent) on Taxable Income that is not Qualifying Income under Article 18 of this Decree-Law and any resolution issued by the Cabinet at the suggestion of the Minister in respect thereof.
3. Without prejudice to the provisions of Clauses (1) and (2) of this Article, and based on the Minister's proposal, the Cabinet shall issue a decision regulating all cases, terms, conditions, rules, regulations and procedures for imposing the supplementary tax on multinational enterprises and the exemption from same, so that the total percentage of the actual tax imposed on them would be (15%) fifteen percent.

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 (7) of this Decree-Law.
d. A Person engaged in a Non-Extractive Natural Resource Business, that meets the conditions of Article (8) of this Decree-Law.
e. A Qualifying Public Benefit Entity under Article (9) of this Decree-Law.
f. A Qualifying Mutual Fund under Article (10) of this Decree-Law.
g. A public pension or social security fund, or a private pension or social security fund that is regulated by the competent authority in the State and that 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 that:
i. Undertakes part or all of the activity of the Exempt Person.
ii. Is engaged exclusively in holding assets or investing funds for the benefit of the Exempt Person.
iii. Only carries out activities that support those carried out by the Exempt Person.
i. Any other Person as may be determined in a resolution issued by the Cabinet at the suggestion 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 (8) of this Decree-Law, respectively, shall be treated as an Exempt Person for the purposes of Articles (26), (27), (38) and (40) of this Decree-Law.
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 and manner 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 fails 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 cases:
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 with the relevant conditions of this Decree-Law.
c. Any other cases 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 this Decree-Law shall not apply thereto.
2. Notwithstanding Clause (1) of this Article, a Government Entity shall be subject to the provisions of this Decree-Law if it conducts a Business or Business Activity under a License issued by a Licensing Authority.
3. Any Business or Business Activity conducted by a Government Entity under a License issued by a Licensing Authority shall be treated as an independent Business, and the Government Entity shall keep financial statements for this Business separately from the Government 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.
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 provisions of this Decree-Law shall not apply thereto.
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 the Government Controlled Entity shall keep financial statements for this Business separately from 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 the Corporate tax and the provisions of this Decree-Law shall not apply to its Extractive Business if it meets all of the following conditions :
a. The Person directly or indirectly holds or has an interest in a right, concession or License issued by the Local Government to undertake its Extractive Business.
b. The Person is actually 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 submitted 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 both an 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 of being exempted 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 derive income from any other Business if such other Business is supporting or incidental to that 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, the following 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 expenses shared between the Extractive Business and the other Businesses of the Person shall be divided pro rata their respective Revenues in the Tax Period, unless such expenses were taken into account at different percentages for the purposes of calculating the tax payable by the Person under the applicable legislation of the relevant Emirate in respect of its Extractive Business, in which case the expenses shall be divided in accordance with the latter percentage.
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 actually subject to tax under the applicable legislation of the Emirate for the purposes of this Article if the Local Government imposes a tax on income or profits, or a tax on royalty or revenue, or any other form of taxes, duties or levy in respect of such Person's Extractive 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 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 shall not 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 License 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 actually 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 both a Non-Extractive Natural Resource Business and any other Business that is within the scope of this Decree-Law, the following shall apply:
a. The income derived from the Non-Extractive Natural Resource 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 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 derive income from any other Business where such other Business is ancillary or incidental to that 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, the following 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 Non-Extractive Natural Resource Business.
b. Any common expenses shared between the Non-Extractive Natural Resource Business and the other Businesses of the Person shall be divided pro rata their respective Revenues in the Tax Period, unless such expenses were taken into account at a different percentages for the purposes of calculating the tax payable by the Person under the applicable legislation of the relevant Emirate in respect of its Non-Extractive Natural Resource Business, in which case the expenses shall be divided in accordance with the latter percentage.
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 the provisions 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 actually subject to tax under the applicable legislation of the Emirate, for the purposes of this Article if the Local Government imposes a tax on income or profits, a royalty or revenue tax, or any other form of tax, charge or levy in respect 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 the conditions of being exempt from Corporate Tax under this Article or Article (7) of this Decree-Law.

Article (9) Qualifying Public Benefit Entity

1. A Qualifying Public Benefit Entity shall be exempt from Corporate Tax if all of the following conditions are met:
a. It is established and operated for any of the following:
I. Exclusively for religious, charitable, scientific, artistic, cultural, athletic, educational, healthcare, environmental, humanitarian, animal protection or other similar purposes.
II. As a professional entity, chamber of commerce, or a similar entity operated 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 was established.
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 expenses 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 a Qualifying Public Benefit Entity, Government Entity or Government Controlled Entity.
e. Any other conditions as may be prescribed in a resolution issued by the Cabinet at the suggestion of the Minister.
2. The exemption under Clause (1) of this Article shall be effective from the beginning of the Tax 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 the timeline specified by the Authority.

Article (10) Qualifying Mutual Fund

1. A mutual fund may apply to the Authority to be exempt from Corporate Tax as a Qualifying Mutual fund where all of the following conditions are met:
a. The mutual fund or the mutual fund's manager is subject to the regulatory oversight of a competent authority in the State, or a foreign competent authority recognized for the purposes of this Article.
b. Shares in the mutual fund are traded on the Recognized Stock Exchange, or are marketed and made available sufficiently and widely to investors.
c. The main or principal purpose of the mutual fund is not to avoid corporate tax.
d. Any other conditions as may be prescribed in a decision issued by Cabinet at the suggestion of the Minister.
2. For the purposes of monitoring the continued compliance by a Qualifying Mutual 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 this Decree-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, established or otherwise recognized under the applicable legislation of the State, including a Free Zone Person.
b. A juridical person that is incorporated, established or otherwise recognized under the applicable legislation of a foreign jurisdiction and is effectively managed and controlled 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 resolution issued by the Cabinet at the suggestion 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:
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; or
c. Has a nexus in the State as specified in a resolution issued by the Cabinet at the suggestion 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 to 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 the provisions of this Decree-Law.
2. The Taxable Income of a Resident Person, who 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 (11) of 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 resolution 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 a State Sourced Income in any of the following cases:
a. Where it is derived by a Resident Person.
b. Where it is derived by a Non-Resident Person and the income received has been paid or accrued in connection with, and attributable to, a Permanent Establishment of 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.
b. Income from the provision of services that are rendered or used 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 the right to use any intellectual or intangible property in the State, or from granting a permission to use them in the State.
g. Interest that meets any of the following conditions:
i. The loan is secured by movable or immovable property located in the State.
ii. The borrower is a Resident Person.
iii. The borrower is a Government Entity.
h. Insurance or reinsurance premiums in any of the following cases:
i. The insured asset is located in the State.
ii. The insured Person is a Resident Person.
iii. The insured activity is conducted in the State.

Article (14) Permanent Establishment

1. A Non-Resident Person shall be deemed to have a Permanent Establishment in the State in any of the following cases:
a. If 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. If 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. If it has any other form of nexus in the State as specified in a resolution 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 place in the State includes:
a. A place of management where management and commercial decisions that are necessary for conducting 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. Installations or platforms 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 platforms 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, last more than (6) six months, including connected activities that are conducted at the site 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 used solely for any of the following purposes:
a. Storing, displaying or delivering 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 supporting nature for the Non- Resident 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 supporting nature.
4. Clause (3) of this Article shall not apply to a fixed or permanent place in the State that is used 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 another place in the State where all of the following conditions are met:
a. Where the same place or the other place constitutes a Permanent Establishment of 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 two places is not of a preparatory or supporting nature and together would form a cohesive 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 if 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 if 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 cases:
a. If 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 the following conditions are met:
i. The activities being conducted in the State by the natural person are not part of the core income-generating activities of the Non-Resident Person or its Related Parties.
ii. The Non-Resident Person does not derive State Sourced Income.

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, if 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 competent authority 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 independent capacity.
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 the State 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 resolution 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 all kinds.
b. Transactions of buying or selling any foreign currency or placement of funds against interest.
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 Association

1. For the purposes of this Decree-Law, unless an application is made under Clause (8) of this Article, and subject to any conditions the Minister may prescribe, the Unincorporated Association itself shall not be considered a Taxable Person, and Persons conducting a Business as an Unincorporated Association shall be treated as individual Taxable Persons.
2. Where Clause (1) of this Article applies, a Person who is a partner in an Unincorporated Association shall be treated as:
a. Conducting the Business of the Unincorporated Association.
b. Having a status, intention, and purpose of the Unincorporated Association.
c. Holding assets that the Unincorporated Association holds.
d. Being party to any arrangement to which the Unincorporated Association is a party.
3. For the purposes of Clause (1) of this Article, the assets, liabilities, income and expenses of the Unincorporated Association shall be allocated to each partner pro rata their distributive shares in that Unincorporated Association, or in the manner prescribed by the Authority where the distributive share of a partner cannot be identified.
4. The Taxable Income of a partner in an Unincorporated Association shall take into account the following:
a. Expenses incurred directly by the partner in conducting the Business of the Unincorporated Association.
b. Interest Expense incurred by the partner in relation to contributions made to the capital account of the Unincorporated Association.
5. Interest paid by an Unincorporated Association to a partner on their capital account shall be treated as an allocation of income to the partner and is therefore not a deductible expenses for the purpose of calculating the Taxable Income of that partners incorporated Association.
6. For the purposes of calculating and settling the Corporate Tax Payable of a partner in an Unincorporated Association under Chapter Thirteen of this Decree-Law, any foreign tax incurred by the Unincorporated Association shall be allocated as a Foreign Tax Credit to each partner pro rata their distributive share in the Unincorporated Association.
7. A Foreign Partnership shall be treated as an Unincorporated Association for the purposes of this Decree-Law if all of the following conditions are met:
a. The Foreign Partnership is not subject to tax under the laws of the foreign jurisdiction.
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 Association can make an application to the Authority for the Unincorporated Association 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 Association in respect of the Business conducted by the Unincorporated Association.
b. Each partner in the Unincorporated Association shall remain jointly and severally liable for the Corporate Tax Payable by the Unincorporated Association for those Tax Periods when they are partners in the Unincorporated Association.
c. One partner in the Unincorporated Association shall be appointed as the partner responsible for any obligations and proceedings in relation to this Decree-Law on behalf of the Unincorporated Association.
10. Where the application under Clause (8) of this Article is approved, the Unincorporated Association shall be treated as a Taxable Person effective from the commencement of the Tax Period during 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 may submit an application to the Authority to be treated as an Unincorporated Association for the purposes of this Decree-Law if all of the following conditions are met:
a. The Family Foundation was established for the benefit of identified or identifiable natural persons and/or for the benefit of a public benefit entity.
b. The principal activity of the Family Foundation is to receive, hold, invest, spend funds, or dispose of the assets associated with savings or investment, or otherwise manage them.
c. The Family Foundation does not conduct any activity that would have constituted a Business or Business Activity under Clause (6) of Article (11) of this Decree-Law had the activity been carried out or its assets been held directly by its founder, settlor, or any of its beneficiaries.
d. The main or principal purpose of the Family Foundation is not the avoidance of Corporate 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 Association effective from the commencement of the Tax Period during 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 with the 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 actual and sufficient existence in the State.
b. Derives Qualifying Income as specified in a resolution issued by the Cabinet at the suggestion 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) of this 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 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 is registered, such period may be extended in accordance with any conditions as may be determined in a resolution 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 may elect to be subject to Corporate Tax at the rates 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 during which the election is made.
b. The commencement of the Tax Period following the Tax Period during which the election 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 basis of adequate, standalone financial statements prepared for financial reporting purposes in accordance with the accounting standards accepted in the State.
2. The Taxable Income for a Tax Period shall be the Accounting Income for that period, which was adjusted, as may be required, according to the following:
a. Any unrealized 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 a resolution issued by the Cabinet at the suggestion of the Minister.
h. Any income or expenses that has not otherwise been taken into account in determining the Taxable Income under the provisions of this Decree-Law as may be specified in a resolution 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, and subject 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 realization basis in relation to:
a. all assets and liabilities that are subject to accounting for fair value or impairment under the applicable accounting standards; or
b. all assets and liabilities held on capital account at the end of a Tax Period, whilst taking into account any unrealized gain or loss that arises in connection with the 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 applicable accounting 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 expenses 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 other than those held on a capital account.
d. An "unrealized gain or loss" includes an unrealized foreign exchange gain or loss.
5. Notwithstanding Clauses (1) and (3) of this Article, the Minister may prescribe any of the following for the purposes of this Decree-Law:
a. The circumstances and conditions under which a Person may prepare financial statements using the cash basis accounting.
b. Any adjustments to the accounting standards to be applied for the purposes of determining the Taxable Income for a Tax Period.
c. A different basis for determining the Taxable Income of a Qualifying Business Activity.
6. Subject to any conditions prescribed under Clause (5) of this Article, a Taxable Person may submit 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 is made 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 applicable accounting 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; and
b. 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 this Decree-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 the conditions of Clause (1) of this Article, and may request any relevant information or records from the Taxable Person within the timeline prescribed by the Authority.

Chapter Seven: Exempt Income
Article (22) Exempt Income

The following income and related expenses 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 Person.
2. Dividends and other profit distributions received from an Equity participation in a foreign juridical person as specified in Article (23) of this Decree-Law.
3. Any other income from an Equity participation as specified in Article (23) of this Decree-Law.
4. Income of a Foreign Permanent Establishment that meets the condition of Article (24) of this Decree-Law.
5. Income derived by a Non-Resident Person from operating aircraft or ships in international transportation that meets the conditions of Article (25) of this Decree-Law.

Article (23) Participation Exemption

1. Income from an equity participation shall be exempt from Corporate Tax, subject to the conditions of this Article.
2. A Equity participation means, owning equity at 5% (five percent) or more of the shares or capital of a juridical person, referred to as a "Participation" for the purposes of this Chapter if all of the following conditions are met:
a. The Taxable Person has held, or has the intention to hold, the Equity participation for an uninterrupted period of at least (12) twelve months.
b. The Participation is subject to Corporate Tax or any other tax imposed under the applicable legislation of the country or territory in which the juridical person is a resident, which is of a similar character to Corporate Tax at a rate not less than the rate 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 the Participation, 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 the Participation consist of ownership interests or entitlements that would not have qualified for an exemption from Corporate Tax under this Article if held directly by the Taxable Person, subject to any conditions that may be prescribed under paragraph (e) of this Clause.
e. Any other conditions as may be prescribed by the Minister.
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 and holding 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 an equity participation.
4. A Participation in a Qualifying Free Zone Person or an Exempt Person shall be treated as having 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 that is not a Resident Person under paragraph (b) of Clause (3) of Article (11) of this Decree-Law.
b. Gains or losses on the transfer, sale, or other disposition of Equity participation (or part thereof) derived after the 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 Equity participation.
d. Impairment gains or losses in relation to Equity participation.
6. The exemption under this Article shall not apply to income derived by the Taxable Person from an Equity participation insofar as:
a. the Participation may claim a deduction for the dividend or other distributions made to the Taxable Person under the applicable tax legislation;
b. the Taxable Person has recognized a deductible impairment loss in respect of the Equity participation prior to the Equity participation meeting the conditions of Clause (2) of this Article;
c. the Taxable Person or its Related Party who is subject to Corporate Tax under this Decree-Law has recognized 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 is reflected in a subsequent Tax Period, the associated income of the Taxable Person shall be exempt from Corporate Tax in that Tax Period up to the amount of income from the Equity participation 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 realized 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 interest in 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 the calculation 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 a juridical person meets the minimum ownership requirement under Clause (2) of this Article where the acquisition cost of that ownership interest exceeds a threshold specified by the Minister.

Article (24) Foreign Permanent Establishment Exemption

1. A Resident Person may elect to not take into account the income, and associated expenses, 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 the following 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 expenses in any of its Foreign Permanent Establishments, calculated as if the relevant Foreign Permanent Establishment were a Resident Person under this Decree-Law; and
c. any Foreign Tax Credit that would have been available under Article (47) of this Decree-Law had the election under Clause (1) of this Article not been made.
3. For the purposes of this Article, "income and associated expenses" of a Taxable Person's Foreign Permanent Establishments for a Tax Period is the aggregate of the income and associated expenses in each of the relevant foreign jurisdictions.
4. In determining the income and associated expenses of a Foreign Permanent Establishment, a Resident Person and each of its Foreign Permanent Establishments shall be 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) of this 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 the applicable 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 in international 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, packages, merchandise or goods by air or by sea.
b. Leasing or chartering aircraft or ships used in international transportation.
c. Leasing of equipment which are integral to the seaworthiness of ships or the airworthiness of aircraft used in international transportation.
2. The Resident Person that performs any of the activities under Clause (1) of this Article is exempt, or is not subject to a 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 is resident.

Chapter Eight: Reliefs
Article (26) Transfers Within a Qualifying Group

1. No gain or loss needs to be taken into account in determining the Taxable Income in relation 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 Non-Resident Persons that have a Permanent Establishment in the State.
b. Either of the Taxable Persons owns, directly or indirectly, ownership interest of at least (75%) (seventy-five percent) in the other Taxable Person, or a third Person owns, directly or indirectly, ownership interest of at least (75%) (seventy-five percent) in each of the Taxable Persons.
c. None of the Persons are an Exempt Person.
d. None of the Persons are a Qualifying Free Zone Person.
e. The Fiscal 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 at the time of transfer so that neither a gain nor a loss arises; and
b. 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 from the 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 treated as having taken place at Market Value on the date of the transfer for the purposes of determining 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 Business to another Person who is a Taxable Person or will become a Taxable Person as a result of the transfer in exchange for shares or other ownership interests of the Taxable 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 in exchange for shares or other ownership interests of the Taxable Person that is the transferee, 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 Fiscal 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 or other 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 shall 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.
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 transferred and 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 ownership interests surrendered, less the value of any other form of consideration received.
d. Any Unutilized 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 was performed may be deemed carried forward Tax Losses of the Taxable Person that is the transferee, subject to the conditions to be prescribed by the Minister.
4. The provisions of this Article shall apply, as the context requires, where, in the case of transfer 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; or
c. no shares or ownership interests are received by the Taxable Person who is a partner in an Unincorporated Association 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 (c) of Clause 3 of this Article shall apply only to those Unutilized Tax Losses that can be reasonably 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 from the 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 relevant Taxable Persons belong.
b. There is a subsequent transfer or disposal of the Business or the independent part of the Business transferred under Clause (1) of this Article.
7. Where Clause 6 of this Article applies, the transfer of the Business or any independent part of the Business shall be treated as having taken place at Market Value at the date of the transfer.

Chapter Nine: Deductions
Article (28) Deductible Expenses

1. Expenses incurred wholly and exclusively for the purposes of the Taxable Person's Business that are not capital in nature shall be deductible in the Tax Period in which they were incurred, subject to the provisions of this Decree-Law.
2. For the purposes of calculating the Taxable Income for a Tax Period, no deduction is allowed for the following:
a. Expenses not incurred for the purposes of the Taxable Person's Business.
b. Expenses incurred in deriving Exempt Income.
c. Losses not connected with or arising out of the Taxable Person's Business.
d. Such other expenses as may be specified in a resolution issued by the Cabinet at the suggestion of the Minister.
3. If expenses are incurred for more than one purpose, a deduction shall be allowed for:
a. Any identifiable part or proportion of the expenditure incurred wholly and exclusively for the purposes of deriving Taxable Income.
b. An appropriate percentage of any unidentifiable part or percentage of the expenses incurred for the purposes of deriving Taxable Income that are determined on a fair and reasonable basis, having regard to the relevant facts and circumstances of the Taxable Person's Business.

Article (29) Interest Expense

Notwithstanding paragraph (b) of Clause (2) of Article (28) of this Decree-Law, Interest Expense shall be deductible for the Tax Period in which it is incurred, subject to the other provisions 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 Expense shall be deductible up to (30%) (thirty percent) of the Taxable Person's accounting earnings before interest, taxes, depreciation and amortization (EBITDA) for the relevant Tax Period, excluding any Exempt Income under Article (22) of this Decree-Law.
2. A Taxable Person's Net Interest Expense for a Tax Period is the amount of the Interest Expense incurred during the Tax Period in addition to the amount of any Net Interest Expense carried forward under Clause (4) of this Article, which 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 Expense of the Taxable Person for the relevant Tax Period does not exceed an amount specified by the Minister.
4. The amount of Net Interest Expense that is not deductible under Clause (1) of this Article may be carried forward and deducted in the subsequent (10) ten Tax Periods in the order in which the amount was incurred, subject to Clauses (1) and (2) of this Article.
5. Interest Expense that is not deductible under any other provision of this Decree-Law shall be excluded from the calculation of Net Interest Expense 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 Insurer.
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 or control and they are obligated under applicable accounting standards to have consolidated financial statements.

Article (31) Special Interest Deduction Limitation Rule

1. No deduction shall be allowed for Interest Expense 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 the Related Party.
b. A redemption, repurchase, reduction or return of capital to the Related Party.
c. A contribution in the capital of the Related Party.
d. The acquisition of an ownership interest in a Person who is a Related Party or becomes a Related Party following the acquisition.
2. Clause (1) of this Article shall not apply where the Taxable Person can demonstrate that the main purpose of obtaining the loan and carrying out the transaction referred to under 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 less than the rate specified in paragraph (b) of Clause (1) of Article (3) of this Decree-Law.

Article (32) Entertainment Expenses

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 expenses incurred during a Tax Period.
2. Clause (1) of this Article applies to any expenses incurred for the purposes of receiving and entertaining the Taxable Person's customers, shareholders, suppliers or other business partners, including, but not limited to, expenses 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 expenses as specified by the Minister.

Article (33) Non-deductible Expenses

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 the amounts awarded as compensation for damages or breach of contract.
3. Bribes or other illicit payments.
4. Dividends, profit distributions or benefits of a similar nature paid to an owner of the Taxable Person.
5. Amounts withdrawn from the Business by a natural person who is a Taxable Person under paragraph (c) of Clause (3) of Article (11) of this Decree-Law or a partner in an Unincorporated Association.
6. Corporate Tax imposed on a Taxable Person under this Decree-Law.
7. Inputs' Value Added Tax incurred by a Taxable Person that is recoverable under Federal Decree-Law No. (8) of 2017 referred to and what replaces it.
8. Tax on income imposed on the Taxable Person outside the State.
9. Such other expenses as specified in a resolution issued by the Cabinet at the suggestion of the Minister.

Chapter Ten: Transactions with Related Parties and Connected Persons
Article (34) Arm's Length Principle

1. In determining the Taxable Income, transactions and arrangements between Related Parties shall 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 shall be deemed to have met the arm's length standard if the results of the transaction or arrangement are consistent with the results that would have been realized if the Persons who were not Related Parties had engaged in a similar transaction or arrangement under similar circumstances.
3. The arm's length result of a transaction or arrangement between Related Parties shall 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 in Clause (3) of this Article where the Taxable Person can demonstrate that none of the above methods can be reasonably applied to determine an arm's length result and that any 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 a combination of transfer pricing methods under Clause (3) or (4) of this Article shall be made having regard to the most reliable transfer pricing method and taking into account the 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 the transaction or arrangement.
6. The Authority's examination as to whether income and expenses resulting from the Taxable 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 accordance with 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. The application of the selected transfer pricing method or a 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 result of 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 to achieve the arm's length result that best reflects the facts and circumstances of the transaction or arrangement.
9. Where the Authority makes an adjustment to the Taxable Income pursuant to Clause (8) of 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 or arrangement to meet the arm's length standard, the Authority shall make a corresponding adjustment to the Taxable Income of the Related Party that is party to the relevant 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 may submit an application to the Authority to make a corresponding adjustment to its Taxable Income.

Article (35) Related Parties and Controls

1. For the purposes of this Decree-Law, "Related Parties" means any of the following:
a. Two or more natural persons who are related up to the fourth degree of kinship or affiliation, including by way of adoption or guardianship.
b. A natural person and a juridical person where:
i. the natural person or one or more Related Parties of the natural person are shareholders in the juridical person, and the natural person, alone or together with its Related Parties, directly or indirectly owns a 50% (fifty percent) or a greater ownership interest in the juridical person; or
ii. the natural person, alone or together with its Related Parties, directly or indirectly Controls the juridical person.
c. Two or more juridical persons where:
i. one juridical person, alone or together with its Related Parties, directly or indirectly owns a 50% (fifty percent) or a greater ownership interest in the other juridical person;
ii. one juridical person, alone or together with its Related Parties, directly or indirectly Controls the other juridical person; or
iii. any Person, alone or together with its Related Parties, directly or indirectly owns a 50% (fifty percent) or a 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 Association.
f. A Person who is the trustee, founder, settlor or beneficiary of a trust or foundation, and its Related Parties.
2. For the purposes of this Decree-Law, "Control" means the ability of a Person, whether in their 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 the other Person.
b. The ability to determine the composition of 50% (fifty percent) or more of the Board of directors of the other Person.
c. The ability to receive 50% (fifty percent) or more of the profits of the other Person.
d. The ability to determine, or exercise significant influence over, the conduct of the Business and affairs of the other 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 that the payment or benefit corresponds with the Market Value of the service, benefit or otherwise provided by the Connected Person and is incurred wholly and exclusively by the Taxable Person for the purposes of the Taxable Person's Business.
2. For the purposes of this Decree-Law, a Person shall be deemed to be a Connected Person of a Taxable Person if that Person is:
a. An owner of the Taxable Person.
b. A director or officer at 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 Association, a Connected Person is any other partner in that same Unincorporated Association, and any Person that is a Related Party of that partner.
5. To determine that a payment or benefit provided by the Taxable Person corresponds with the Market Value of the service or otherwise provided by the Connected Person in exchange therefor, the relevant provisions of Article (34) of this Decree-Law shall apply as the context 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 Recognized Stock Exchange.
b. A Taxable Person that is subject to the regulatory oversight of a competent authority in the State.
c. Any other Person as may be determined in a resolution issued by the Cabinet at the suggestion 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 arrive at 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 in a resolution 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 be prescribed in a resolution 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, or otherwise not taken into account under this Decree-Law.
4. A Tax Loss carried forward to a subsequent Tax Period shall be set off against the Taxable Income of that subsequent Tax Period, before any remainder can be carried forward to a further subsequent Tax Period, or any Tax Loss transferred under Article (38) of this Decree-Law can be utilized.

Article (38) Transfer of Tax Loss

1. A Tax Loss or a portion thereof may be offset against the Taxable Income of another Taxable Person where all of the following conditions are met:
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 indirect ownership interest of at least (75%) (seventy-five percent) in each of the Taxable Persons.
d. The joint 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 the Tax Period in which the other Taxable Person offsets the Tax Loss transferred against 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 Fiscal 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 (1) of 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) of Article (37) of this Decree-Law; and
c. 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 Carryforward

1. Tax Losses can only be carried forward and utilized in accordance with the provision of Clause 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 end of 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.
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 for determining 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 ownership change;
b. the Taxable Person has not made significant changes to the core identity or operations of its Business since the ownership change; and
c. 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 Recognized 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 purposes of 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 the Subsidiary'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.
f. Neither the Parent Company nor the Subsidiary is a Qualifying Free Zone Person.
g. The Parent Company and the Subsidiary have the same Fiscal 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 in which 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 members of 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 with the 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 and the 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:
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 any of 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 treated as leaving that 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.
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 treated as 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 each 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. Unutilized 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 as this income is attributable to the relevant Subsidiary.
4. Where a new Subsidiary joins an existing Tax Group, Unutilized Tax Losses of the existing Tax Group cannot be used to offset the Taxable Income of the Tax Group insofar this income 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 Unutilized pre-Grouping Tax Losses of the relevant Subsidiary.
7. On cessation of a Tax Group, Unutilized Tax Losses of the Tax Group shall be allocated as follows:
a. Where the Parent Company continues to be a Taxable Person, all Tax Losses shall remain 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 Unutilized 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 the Tax Group within (2) two years from the date of the transfer, unless the associated income 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 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 shall prepare consolidated financial statements in accordance with accounting standards applied in the State.

Chapter Thirteen: Calculation of Corporate Tax Payable
Article (43) Currency

For the purposes of this Decree-Law, all amounts shall be quantified in the United Arab Emirates dirham. Any amount quantified in another currency shall be converted at the applicable 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 Payment of Corporate Tax

Corporate Tax due under this Decree by Law shall be paid in the following order:
1. By using the withholding tax credit at source attributable to the Taxable Person and determined pursuant to Article (46) of this Decree by Law.
2. Where a remaining amount of Corporate Tax due exists after applying Clause (1) of this Article, the foreign tax credit available to the Taxable Person and determined pursuant to Article (47) of this Decree by Law shall be used.
3. Where a remaining amount of Corporate Tax due exists after applying Clause (2) of this Article, any credits or other forms of incentives or facilities determined pursuant to a Cabinet Resolution issued upon the proposal of the Minister shall be used.
4. Where a remaining amount of Corporate Tax payable exists after applying Clause (3) of this Article, such amount shall be paid in accordance with Article (48) of this Decree by Law.

Article (45) Withholding Tax

1. The income earned in the State by a non-resident person shall be subject to tax at a rate of (0%) zero percent in form of withholding tax, or at any other rate for withholding tax to be determined by a Cabinet resolution upon the proposal of the Minister, to the extent that such income is not attributable to a permanent establishment or a connection in accordance with the provisions of Paragraph (A) or Paragraph (C) of Clause (3) of Article (12) of this Decree-Law.
2. As an exception to Clause (1) of this Article, the Cabinet may issue a resolution upon a proposal of the Minister to determine categories of income earned in the State subject to withholding tax at rates specified in that resolution.
3. The Cabinet may issue a resolution upon a proposal of the Minister to determine any other income subject to withholding tax at rates specified in that resolution.
4. The withholding tax that is payable under this Article shall be deducted from the total amount of the payment and paid to FTA in accordance with the forms and procedures and within the period specified by FTA. The FTA may add controls or conditions for the purposes of implementing the provisions of this Clause.

Article (46) Withholding Tax Credit

1. If a person becomes subject to tax during a taxation period, the corporate tax payable under Article (3) of this Decree-Law may be reduced by an amount equal to the amount of the withholding tax credit for the same taxation period.
2. The maximum withholding tax credit under this Decree-Law shall be the lesser of the following:
a. The amount of withholding tax deducted under Clause (4) of Article (45) of this Decree-Law.
b. The amount of corporate tax payable under this Decree-Law.
3. The excess withholding tax credit for the taxation period arising as a result of the application of Clause (2) of this Article shall be refunded to the taxpayer, 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 unutilized Foreign Tax Credit as a result of Clause (2) of this Article cannot be carried forward 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 shall settle the Corporate Tax Payable under this Decree-Law within (9) nine months 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 submit an application to the Authority for a Corporate Tax refund 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.

Article (49) BIS Claiming Unused Tax Credit

1. The Taxable Person may claim the unused amount of tax credits that may arise from the incentives or facilities prescribed pursuant to Paragraph (g) of Clause (2) of Article (20) and Clause (3) of Article (44) of this Decree by Law, in the cases and in accordance with the periods, controls, and procedures issued by a Cabinet Resolution upon the proposal of the Minister.
2. The Authority may withhold amounts from Corporate Tax revenues and Top-Up Tax revenues for the purposes of settling the amounts claimed pursuant to Clause (1) of this Article, based on a decision issued by the Board of Directors of the Authority.

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 thereof, is not for a valid commercial or other non-fiscal reason which reflects economic reality; and
b. the main purpose or one of the main purposes of the transaction or arrangement, or any part thereof, 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 erroneous refund of Corporate Tax.
b. Avoidance or reduction of Corporate Tax Payable.
c. Deferral of the payment of Corporate Tax or expediting its refund.
d. Avoidance of an obligation to deduct or compute the 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 shall issue an assessment giving effect to the determination, which may include:
a. allowing or disallowing any exemption, deduction or relief in calculating the Taxable 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. recharacterizing, for the purposes of this Decree-Law, the nature of any payment or other amount, or any part thereof; or
d. disregarding the effect that would otherwise result from the application of other provisions 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 shall be considered:
a. The manner in which the transaction or arrangement was entered into or carried out.
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 this Decree-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 shall demonstrate that the determination made under Clause (3) of this Article is just and reasonable.

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 and manner 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 the relevant Person under paragraphs (e), (f), (g), (h) and (i) of Clause (1) of Article (4) of this Decree-Law, or the Unincorporated Association, as applicable, to register for Corporate Tax and obtain a Tax Registration Number.
3. The Authority shall, at its discretion and based on the 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 Fines 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 such other 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 the conditions under Clause (2) of this Article have been met; or
b. the date the Taxable Person ceases to exist.

Chapter Seventeen: Tax Returns and Clarifications
Article (53) Tax Returns

1. Subject to Article (51) of this Decree-Law, a Taxable Person shall 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 Decree-Law.
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 or records as shall be reasonably required by the Authority for the purposes of implementing the provisions of this Decree-Law.
4. Notwithstanding the provisions of this Article and any other relevant provision of this Decree-Law, the Minister may prescribe the form and manner in which a Tax Return and other information are to be filed with the Authority by a Taxable Person where the disclosure 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 1 of 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 the authorized partner in an Unincorporated Association whose application to become subject to corporate tax under Clause (8) of Article (16) of this Decree-Law was not approved, to file a declaration on behalf of all the partners in the Unincorporated Association.
7. The Parent Company shall 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 and maintain audited or certified financial statements.
3. For the purposes of Clause (1) of this Article, the Authority may request a partner in an Unincorporated Association to provide financial statements showing all of the following:
a. The total assets, liabilities, income and expenses of the Unincorporated Association.
b. The partner's distributive share in the Unincorporated Association's assets, liabilities, income and expenses.

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 a Tax Period meet the conditions prescribed by the Minister, the Taxable Person shall 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 shall 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 a 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 following the request by the Authority, or by any such other later date as directed by the Authority.

Article (56) Record Keeping

1. Notwithstanding the provisions of the Tax Procedures Law, a Taxable Person shall maintain 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 shall maintain 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 Fiscal Year or part thereof for which a Tax Return is required to be filed.
2. For the purposes of this Decree-Law, the Fiscal Year of a Taxable Person shall be the Gregorian 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 the conditions to be set by the Authority.

Article (59) Clarifications

1. A Person may make an application to the Authority for a clarification regarding the application of this Decree-Law or the conclusion of an advance pricing agreement with respect 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 manner prescribed by the Authority.

Chapter Eighteen: Violations and Penalties
Article (60) Assessment of Corporate Tax and Fines

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 resolutions issued for the implementation of its provisions, the Authority may prescribe the circumstances and conditions 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 resolutions issued for the implementation 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 closing balance sheet prepared for financial reporting purposes based on the accounting standards applicable in the State on the last day of the Fiscal Year that ends immediately before the first Tax Period commences, subject to any conditions or adjustments that may be prescribed 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 Decree-Law.
3. For the purposes of Clauses (1) and (2) of this Article, and notwithstanding the provisions of 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 is published in the Official Gazette.
4. The Cabinet may, at the suggestion of the Minister, issue a resolution prescribing other transitional measures related to the implementation of this Decree-Law and the application of its provisions.

Chapter Twenty: Closing provisions
Article (62) Delegation of Power

The Minister may delegate his powers under this Decree-Law, in full or in part, to the Authority, where the Minister deems appropriate.

Article (63) Administrative Policies and Procedures

The administrative policies, procedures and general instructions in relation to the requirements imposed on a Person under this Decree-Law shall be issued by the Authority in coordination 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 the Authority 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

Revenue from corporate tax, supplementary tax, and administrative fines collected pursuant to this Decree-Law shall be subject to sharing between the Federal Government and local governments in accordance with the provisions of the federal law in force in this regard.

Article (66) International Agreements

To the extent that the terms of an international agreement in force in the State are inconsistent 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 and the Authority shall issue the necessary decisions, within their respective powers, to implement the provisions of this Decree-Law.
2. The Cabinet may, at the suggestion of the Minister, issue implementing resolutions for this Decree-Law.

Article (68) Repeals

Any text or provisions contrary to or inconsistent with the provisions of this Decree-Law shall hereby be repealed.

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.

Article (70) Publication and Entry into Force of this Decree-Law

This Decree-Law shall be published in the Official Gazette and shall enter into force (15) fifteen days following the date of its publication.

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Federal Decree by Law on Concerning Value-Added Tax (VAT)
Federal Decree by Law on Concerning Value-Added Tax (VAT)

The last update on this law was listed on 01 Oct 2025

Related legislations

Issued Date

23 Aug 2017

Effective Date

01 Jan 2018

Official Gazette Date

30 Aug 2017

Official Gazette No

621 (ملحق)

Legislation State

Active

Legislation Amendments

3

Disclaimer: Every effort has been made to produce an accurate and complete English version of this website/ legislation. However, for the purpose of their interpretation and application, reference must be made to the original Arabic text. In case of conflict, the Arabic text will prevail

Index
Index
Part One: Definitions
Article (1) Definitions
Part Two: Scope of the Tax and Rate of the Tax
Article (2) Scope of the Tax
Article (3) Rate of the Tax
Article (4) Responsibility for the Tax
Part Three: Supply
Chapter One: Supply of Goods and Services
Article (5) Supply of Goods
Article (6) Supply of Services
Article (7) Supply in Special Cases
Article (8) Supply Composed of more than one Component
Article (9) Supply by an Agent
Article (10) Supply by Government Agencies
Chapter Two: Deemed Supply
Article (11) Cases of Deemed Supply
Article (12) Exceptions from the Deemed Supply
Part Four: Tax Registration and Cancellation thereof
Article (13) Mandatory Tax Registration
Article (14) Tax Group
Article (15) Exemption from the Registration
Article (16) Tax Registration of Government Agencies
Article (17) Voluntary Registration
Article (18) Tax Registration for Non-Residents
Article (19) Calculating the Tax Registration Threshold
Article (20) Capital Assets
Article (21) Cases of Tax Deregistration
Article (22) Applying for Cancellation of Tax Registration
Article (23) Voluntary Tax Registration Cancellation
Article (24) Procedures, Controls and Conditions of Tax Registration and Cancellation thereof
Part Five: Rules on Supply
Chapter One: Date of Supply
Article (25) Date of Supply
Article (26) Date of Supply in Special Cases
Chapter Two: Place of Supply
Article (27) Place of Supply of Goods
Article (28) Place of Supply of Water and Energy
Article (29) Place of Supply of Services
Article (30) Place of Supply in Special Cases
Article (31) Place of Supply of Telecommunication and Electronic Services
Chapter Three: Place of Residence
Article (32) Business Establishment
Article (33) Agents
Chapter Four: Value of Supply
Article (34) Value of Supply
Article (35) Importation Value
Article (36) Value of Supply and Deemed Supply for Related Parties
Article (37) Value of Deemed Supply
Article (38) Tax-Inclusive Prices
Article (39) Value of Supply in case of Discount or Subsidies
Article (40) Value of Supply of Vouchers
Article (41) Value of Supply of Postage Stamps
Article (42) Temporary Transfer of Goods
Chapter Five: Profit Margin
Article (43) Levying the Tax based on the Profit Margin
Part Six: Zero Rate and Exemptions
Chapter One: Zero Rate
Article (44) Zero-Rated Supply and Importation
Article (45) Zero-Rated Goods and Services
Chapter Two: Exemptions
Article (46) Exempted Supply
Chapter Three: Single Supply and Mixed Supplies
Article (47) Exempted Supply
Chapter Four: Special Obligations for Calculating the Tax
Article (48) Reverse Charge
Article (49) Importation of Relevant Goods
Chapter Five: Designated Areas
Article (50)
Article (51)
Article (52) Exceptions for Designated Areas
Part Seven: Calculation of the Due Tax
Chapter One: Due Tax for a Tax Period
Article (53) Calculation of the Payable Tax
Article (54) Refundable Input Tax
Article (54) BIS
Article (55) Refund of Refundable Input Tax in the Tax Period
Article (56) Input Tax Paid before the Tax Registration
Article (57) Refund of Tax by Government Agencies and Charities
Chapter Two: Apportionment and Adjustment of the Input Tax
Article (58) Calculating the Refundable Input Taxا
Article (59) Conditions and Mechanism of Input Tax Adjustment
Chapter Three: Capital Assets Scheme
Article (60) Capital Assets Scheme
Chapter Four: Adjustment of Tax after the Supply Date
Article (61) Cases and Conditions for Output Tax Adjustments
Article (62) Mechanism for Output Tax Adjustment
Article (63) Adjustment due to the Issuance of Tax Credit Notes
Article (64)
Chapter Five: Tax Invoices
Article (65) Conditions and Requirements for Issuing Tax Invoice
Article (66) Document of Supply to an Applying State
Article (67) Date of Issuance of Tax Invoices
Article (68) Rounding in Tax Invoices
Article (69) Currency Used in Tax Invoices
Chapter Six: Tax Credit Notes
Article (70) Conditions and Requirements for Issuing Tax Credit Note
Part Eight: Tax Period, Tax Returns, Tax Payment and Refund of Tax
Chapter One: Tax Period
Article (71) Duration of the Tax Period
Chapter Two: Tax Returns and Payment of the Tax
Article (72)
Article (73) Payment of the Tax
Chapter Three: Carrying forward the Excess of Refundable Tax and Tax Refund
Article (74) Excess Refundable Tax
Chapter Four: Further Provisions on Tax Refund
Article (75) Tax Refund in Special Cases
Part Nine: Violations and Penalties
Article (76) Administrative Fine Assessment
Article (77) Tax Evasion
Part Ten: General Provisions
Article (78) Record Keeping
Article (79) Tax Registration Number
Part Eleven: Final Provisions
Article (80) Transitional Provisions
Article (81)
Article (82) The Executive Regulations
Article (83)
Article (84) Repeal of Conflicting Provisions
Article (85) Publishing and Entry into Force
Federal Decree by Law No. (8) of 2017 Concerning Value-Added Tax (VAT)

We, Khalifa bin Zayed Al Nahyan, President of the United Arab Emirates,
Having reviewed:
- The Constitution;
- Federal Law No. (1) of 1972 Regarding the Competences of Ministries and the Powers of Ministers, as amended;
- Federal Law No. (11) of 1981 on the Levy of a Federal Customs Tax on Imports of Tobacco and its Derivatives, as amended;
- Federal Law No. (26) of 1981 on the Commercial Maritime Law, as amended;
- Federal Law No. (5) of 1985 Issuing the Civil Transactions Law, as amended;
- Federal Law No. (3) of 1987 Issuing the Penal Code, as amended;
- Federal Law No. (10) of 1992 Issuing the Law of Evidence in Civil and Commercial Transactions, as amended;
- Federal Law No. (11) of 1992 Issuing the Civil Procedure Code, as amended;
- Federal Law No. (18) of 1993 Issuing the Commercial Transactions Law;
- Federal Law No. (8) of 2004 Regarding the Financial Free Zones;
- Federal Law No. (1) of 2006 On Electronic Commerce and Transactions;
- Federal Law No. (2) of 2008 Regarding National Societies and Associations of Public Welfare;
- Federal Law No. (1) of 2011 Concerning the Public Revenues of the State;
- Federal Law No. (8) of 2011 on the Re-organization of the State Audit Institution;
- Federal Decree-Law No. (8) of 2011 on the Rules for Drafting the Public Budget and Final Account;
- Federal Law No. (4) of 2012 on the Regulation of Competition;
- Federal Law No. (12) of 2014 Concerning the Regulation of the Audit Profession;
- Federal Law No. (2) of 2015 on Commercial Companies;
- Federal Decree-Law No. (13) of 2016 on the Establishment of the Federal Tax Authority;
- Federal Law No. (7) of 2017 on Tax Procedures; and
- The proposal submitted by the Minister of Finance and the approval thereof by the Cabinet,
Hereby enact the following Decree-Law:

Part One: Definitions
Article (1) Definitions

For the purpose of applying the provisions of this Decree-Law, the following words and expressions shall have the meanings assigned thereto respectively, unless the context requires otherwise:
State: The United Arab Emirates.
Minister: The Minister of Finance.
Authority: The Federal Tax Authority.
Value-Added Tax (VAT): A tax levied on the importation and supply of goods and services at every stage of production and distribution, including the deemed supply.
Tax: The Value-Added Tax.
GCC States: All the states which are full members of the Cooperation Council for the Arab States of the Gulf, in accordance with the GCC Charter.
Applying States: The GCC States which apply the Tax law under a legislative instrument issued thereby, and as defined by the Executive Regulations of this Decree-Law.
Goods: Tangible properties which can be supplied, including real property, water and all types of energy, as defined by the Executive Regulations of this Decree-Law.
Services: Anything, other than Goods, which can be supplied.
Importation: Brining Goods into the State from abroad, or receiving Services from abroad.
Relevant Goods: Goods imported and not exempted from the Tax if supplied in the State.
Relevant Services: Services imported, whose place of supply is in the State, and not exempted from the Tax if supplied in the State.
Person: A natural or legal person.
Taxable Person: Each Person that is, or ought to be, registered for the tax purposes under this Decree-Law.
Taxpayer: Any Person that is obligated to pay the Tax in the State, pursuant to this Decree-Law, whether such Person is a taxable Person or an end consumer.
Tax Registration: A procedure under which the Taxable Person or the legal representative thereof registers for the Tax purposes at the Authority.
Tax Registration Number (TRN): A unique number assigned by the Authority to each Person registered for the Tax purposes.
Registrant: A Taxable Person holding a Tax Registration Number.
Recipient of Goods: The Person to whom the Goods are supplied or imported.
Recipient of Services: The person to whom the Services are supplied or imported.
Importer: In relation to the importation of Goods, an importer is the Person who acts as the importer of Goods on the date of Importation for the purposes of customs clearance. In relation to the importation of Services, it means the recipient of such services.
Taxable Trader: A Taxable Person in the Applying States, whose main activity is the distribution of water and all types of energy, as defined by the Executive Regulations of this Decree-Law.
Tax Return: The information and data specified for the Tax purposes provided by the Taxable Person in accordance with the form prepared by the Authority.
Consideration: Anything that has been received or expected to be received for the supply of Goods or Services, whether cash payments or any other forms recognized as compensation.
Business: Any activity that is practiced on a regular, ongoing and independent basis by any Person and in any place, such as industrial, commercial, agricultural, professional, handicraft or service activity, excavation activities or any activity related to the use of tangible or intangible properties.
Exempted Supply: The supply of Goods or Services for a Consideration during the practice of the Business within the State, which shall not be taxed and the input tax levied on may not be refunded except under the provisions of this Decree-Law.
Taxable Supply: The supply of Goods or Services for a Consideration during the practice of the Business by any Person within the State, not including the Exempted Supply.
Deemed Supply: All that is regarded as a supply and treated as a Taxable Supply, in accordance with the cases set forth in this Decree-Law.
Input Tax: The Tax paid or payable by a Person when Goods or Services are supplied to, or importation is made, by such Person.
Output Tax: The Tax levied on the Taxable Supply and on any supply which is deemed Taxable Supply.
Refundable Tax: Amounts paid that may be refunded by the Authority to the Taxpayer under the provisions of this Decree-Law.
Due Tax: The Tax that is calculated and levied under the provisions of this Decree-Law.
Payable Tax: The Tax which becomes due to be paid to the Authority.
Tax Period: A specific period for which the Payable Tax shall be calculated and paid.
Tax Invoice: A written or electronic document in which any taxable supply and its details are recorded, including the electronic invoice, as the case may be.
Tax Credit Note: A written or electronic document in which any amendment to reduce or cancel a taxable supply and its details are recorded, including the electronic tax credit note, as the case may be.
Government Agencies: Ministries, government departments and entities and federal and local public authorities and institutions in the State, or any other entities receiving the treatment prescribed for Government Agencies, in accordance with the resolutions issued by the Cabinet for the purposes of applying the provisions of this Decree-Law.
Charities: Non-governmental, non-profit organizations of public welfare, which are determined by a Cabinet resolution to be issued upon the proposal of the Minister.
Relevant Charitable Activity: A non-profit activity generating no benefits for any owner, member or shareholder of a Charity, and is performed by the Charity within its purposes or objects to carry out a charitable activity in the State or to promote such Charity, as approved by the relevant authorities, or pursuant to its articles of incorporation as a Charity under legislation, decree or federal or local resolution, or based on its license, to carry out a charitable activity through an authority granting such licenses on behalf of the federal government or the Emirate's government.
Mandatory Registration Threshold: An amount specified in the Executive Regulations of this Decree-Law and if the value of Taxable Supplies exceeds or is expected to exceed such amount, the supplier shall apply for the Tax Registration.
Voluntary Registration Threshold: An amount specified in the Executive Regulations of this Decree-Law and if the value of Taxable Supplies or taxable expenses exceeds or is expected to exceed such amount, the supplier may apply for the Tax Registration.
Transport-Related Services: Cargo transport, packaging and sealing; preparation of customs documents; container management services and loading, unloading, storage and movement of goods, or any other services that are closely related or necessary for the completion of transport services.
Business Establishment: The place where the Business is legally established in a state, in accordance with the establishment resolution, and where important management decisions are taken or the functions of the central administration are carried out.
Fixed Establishment: Any fixed place of Business other than the Business Establishment, through which the Person conducts its Business on a regular or permanent basis and which has the sufficient human and technical resources necessary to enable it to supply or receive Goods or Services, including the Person's branches.
Place of Residence: The place where a Person has a Business Establishment or Fixed Establishment, in accordance with the provisions of this Decree-Law.
Non-Resident Person: Any person that has no business headquarters or fixed establishment in the State and usually does not reside therein.
Related Parties: Two or more Persons that are not economically, financially or organizationally separated, where one of them can control the others either by law, shareholding or voting rights.
Customs Legislation: Federal and local legislation regulating customs in the State.
Designated Area: Any area identified by a Cabinet Resolution, upon the proposal of the Minister, as a Designated Area for the purposes of this Decree-Law.
Exportation: Taking Goods outside the State or providing Services to a person whose Business Establishment or Fixed Establishment is outside the State.
Voucher: Any instrument entitling the holder thereof to get access to Goods or Services against the value stated thereon or enclosed therein, or to obtain a discount on the price of Goods or Services, and it does not include postage stamps issued by the Emirates Post Group.
Activities Performed in a Sovereign Capacity : Activities performed by Government Agencies in their sole capacity, with or without a Consideration.
Capital Assets: Business assets designated for long-term use.
Capital Assets Scheme: A scheme whereby the input tax initially refunded is adjusted based on the actual use during a specific period.
Administrative Fines: Amounts to be imposed on the Person by the Authority for violating the provisions of this Decree-Law and Federal Law No. (7) of 2017, on Tax Procedures.
Administrative Fine Assessment: A decision issued by the Authority on due administrative fines.
Excise Tax: A tax levied by virtue of a law on particular Goods.
Tax Group: Two or more Persons registered at the Authority as a single Taxable Person for the tax purposes, in accordance with the provisions of this Decree-Law.
Pure Hydrocarbons: Any type of various pure compounds of a chemical formula composed only of hydrogen and carbon (Cx Hy).
Tax Evasion: The person's use of illegal means which cause reducing the amount of the Due Tax, the non-payment thereof, or the refund of a Tax that such Person is not entitled to refund.
Tax Audit: An action made by the Authority to audit business records or any information, data or commodities related to a Person so as to verify the fulfillment of their obligations, pursuant to the provisions of this Decree-Law or the Tax Procedures Law.
Tax Assessment: Means the Tax Assessment as defined in the Tax Procedures Law.
Voluntary Disclosure: A form prepared by the Authority whereby the Taxpayer notifies the Authority of any errors or omissions in the Tax Return, Tax Assessment or tax refund application, pursuant to the provisions of the Tax Procedures Law.
Tax Procedures Law: Federal Law No. (7) of 2017, on Tax Procedures, as amended, and any federal law superseding the same.
E-invoicing System: An electronic system specifically used for issuing, sending, exchange and sharing of the details of invoice and credit note according to the legislation regulating the tax procedures.
Electronic Invoice: An invoice that is issued, sent and received in a structured electronic format that enables automated and electronic processing, according to the e-invoicing system.
Electronic Credit Note: A credit note that is issued, sent and received in a structured electronic format that enables automated and electronic processing, according to the e-invoicing system.

Part Two: Scope of the Tax and Rate of the Tax
Article (2) Scope of the Tax

The Tax shall be levied on:
1. Every taxable supply and deemed supply carried out by the taxable person.
2. Importation of the relevant goods except for what is specified by the Executive Regulations of this Decree-Law.

Article (3) Rate of the Tax

Subject to the provisions of Part VI of this Decree-Law, the standard rate of the tax to be levied on any supply or importation shall be (5%) in accordance with the provisions of Article (2) hereof based on the value of the supply or importation specified in accordance with the provisions of this Decree-Law.

Article (4) Responsibility for the Tax

The responsibility for the levied tax shall fall on the following:
1. The taxable person that makes any supply set forth in Clause (1) of Article (2) of this Decree-Law;
2. The importer of relevant goods;
3. The registrant acquiring goods in accordance with the provisions of Clause (3) of Article (48) hereof.

Part Three: Supply
Chapter One: Supply of Goods and Services
Article (5) Supply of Goods

The following shall be considered a supply of Goods:
1. Transfer of ownership of the Goods or the right to dispose thereof to another Person, as determined by the Executive Regulations of this Decree-Law.
2. Concluding an agreement between two or more parties, which entails the transfer of Goods later, under the conditions laid down in the Executive Regulations of this Decree-Law.

Article (6) Supply of Services

Each supply not considered a supply of goods shall be deemed as a supply of services, including any provision of services in accordance with what is determined in the Executive Regulations of this Decree-Law.

Article (7) Supply in Special Cases

Notwithstanding the provisions contained in Articles (5) and (6) of this Decree-Law, the following shall not be deemed as a supply:
1. Selling or issuing any Voucher, unless the received Consideration exceeds its declared cash value, as determined by the Executive Regulations of this Decree-Law;
2. Transferring Business or independent part thereof from a Person to a Taxable Person to continue such transferred Business; and
3. Any other supply identified by the Executive Regulations of this Decree-Law.

Article (8) Supply Composed of more than one Component

The Executive Regulations of this Decree-Law shall define the conditions of the transaction of the supply composed of more than one component for a single price, whether such components are goods and/or services.

Article (9) Supply by an Agent

1. Where goods and services are supplied by an agent acting on behalf of a principal, the supply shall be deemed to be made by the principal and for his benefit.
2. Where goods and services are supplied through an agent acting in his own name, the supply shall be treated as a direct supply by the agent and for his benefit.

Article (10) Supply by Government Agencies

1. The government agency shall be deemed as making a supply in the course of business in the following cases:
a. If its activities are performed in a non-sovereign capacity.
b. If its activities are in competition with the private sector.
2. The Cabinet shall issue a resolution, upon the proposal of the Minister, which shall determine the government agencies, their activities considered to be performed in a sovereign capacity and the cases where their activities are considered not in competition with the private sector.

Chapter Two: Deemed Supply
Article (11) Cases of Deemed Supply

The following cases shall be regarded as deemed supply:
1. Supply of goods or services forming the whole assets of the taxable person or part thereof, but such goods or services no longer form part of the assets, provided that the supply is made for no consideration.
2. Transfer of goods forming part of the business assets of a taxable person in the State to his business in one of the applying states, or from the taxable person's business in an applying state to his business in the State, except in the case where such transfer is:
a. deemed temporary pursuant to the Customs Legislation.
b. made as part of another taxable supply of such goods.
3. Supply of goods or services for which input tax may be recovered but they have been used in whole or in part for purposes other than the business, and such supply shall be regarded as deemed supply within the limits of use for non-business purposes.
4. Goods and services owned by the taxable person at the date of cancellation of tax registration.

Article (12) Exceptions from the Deemed Supply

The supply shall not be regarded as deemed supply in the following cases:
1. If the amount of the input tax for the related goods and services is not refunded.
2. If the supply is an exempted supply.
3. If the refunded input tax on the goods and services is adjusted in accordance with the Capital Assets Scheme.
4. If the value of the supply of goods, for each recipient during the period of twelve months, does not exceed the amount determined by the Executive Regulations of this Decree-Law and the supply is intended to use such goods as samples or commercial gifts.
5. If the total output tax payable for all the deemed supplies per person for the period of twelve months is less than the amount specified by the Executive Regulations of this Decree-Law.

Part Four: Tax Registration and Cancellation thereof
Article (13) Mandatory Tax Registration

1. Every Person who has a Place of Residence in the State or in one of the Applying States shall register for the Tax if:
a. The value of the supplies set forth in Article (19) hereunder exceeds, during the previous (12) twelve-month period, the Mandatory Registration Threshold; or
b. It is expected that the value of the supplies set forth in Article (19) hereunder will exceed the Mandatory Registration Threshold during the next (30) thirty days.
2. Every Person who does not have a Place of Residence in the State or in one of the Applying States shall register for the Tax if such Person makes supplies of Goods or Services and no other Person obligated to pay the Due Tax for such supplies is in the State.
3. The Executive Regulations of this Decree-Law shall determine the time limits during which the Person shall notify the Authority of the necessity to register for the Tax and the effective date of the Tax Registration.

Article (14) Tax Group

1. Two or more persons practicing the business may apply for the tax registration as a tax group if the following conditions are satisfied:
a. Each of them shall have a business establishment or fixed establishment in the State.
b. The relevant persons shall be related parties.
c. One or more persons practicing the business in a partnership shall control the others.
2. The Executive Regulations of this Decree-Law shall define the cases where the Authority may reject the application for registering the tax group.
3. No person who practices the business shall have more than one Tax Registration Number, unless otherwise provided for in the Executive Regulations.
4. If the related parties fail to apply for the tax registration as a tax group in accordance with Clause (1) of this Article, the Authority may assess their relation based on their practice of the business on an economic, financial and organizational basis and register the same as a tax group if it verifies their relation in accordance with the controls and conditions established by the Executive Regulations of this Decree-Law.
5. The Authority may cancel the registration of the tax group under the provisions contained in this Article, in accordance with the conditions laid down in the Executive Regulations of this Decree-Law.
6. The Authority may make amendments to those registered as a tax group by adding or removing some persons, upon request of the taxable person or in accordance with the cases set out in the Executive Regulations.

Article (15) Exemption from the Registration

1. The Authority may exempt the Taxable Person, whether registered or unregistered, from the Tax Registration, upon their request, if their supplies are zero-rated only.
2. If any changes to the business of the Taxable Person who is exempted from the Tax Registration occur, pursuant to Clause (1) above, and lead, or would lead, to the elimination of the reason based on which they have been exempted, they shall notify the Authority of such changes within the time limits and according to the procedures identified by the Executive Regulations of this Decree-Law.
3. The Authority shall be entitled to collect the Due Tax and the Administrative Fines for the period of exemption if it found that the Taxable Person is not entitled to be exempted.

Article (16) Tax Registration of Government Agencies

Government agencies to be determined by the Cabinet resolution referred to in Clause (2) of Article (10) of this Decree-Law shall apply for the tax registration and such registration may not be cancelled except under a Cabinet resolution to be issued upon the proposal of the Minister.

Article (17) Voluntary Registration

Any person who is not liable to be registered in accordance with the provisions of this Part may apply for the tax registration voluntarily in the following cases:
1. If such person proves, at the end of any given month, that the value of supplies set forth in Article (19) hereof or the taxable expenses incurred during the previous twelve months has exceeded the Voluntary Registration Threshold.
2. If it is expected, at any time, that the value of supplies set forth in Article (19) hereof or the taxable expenses to be incurred during the next thirty days will exceed the Voluntary Registration Threshold.

Article (18) Tax Registration for Non-Residents

A non-resident person may not take the value of goods and services imported to the State for the purpose of determining whether he is entitled to be registered if the calculation of tax for such goods and services is the responsibility of the importer in accordance with the provisions of Clause (1) of Article (48) of this Decree-Law.

Article (19) Calculating the Tax Registration Threshold

For the purpose of determining whether a person exceeds the Mandatory Registration Threshold and the Voluntary Registration Threshold, the total value of the following shall be calculated:
1. The value of taxable goods and services.
2. The value of relevant goods and relevant services received by the person if not calculated under Clause (1) of this Article.
3. The value of the whole or relevant part of taxable supplies belonging to such person if he acquires, in whole or in part, a business of a person who has made such supplies.
4. The value of taxable supplies made by related parties according to the cases defined by the Executive Regulations of this Decree-Law.

Article (20) Capital Assets

The supply of capital assets belonging to the person during practicing the business shall be disregarded when determining whether a person exceeds the Mandatory Registration Threshold or the Voluntary Registration Threshold.

Article (21) Cases of Tax Deregistration

1. The Registrant shall submit to the Authority an application for the Tax deregistration in any of the following cases:
a. If he ceases to make Taxable Supplies.
b. If the value of the Taxable Supplies made during the period of (12) twelve consecutive months is less than the Voluntary Registration Threshold, and the case set out in Clause (2) of Article (17) of this Decree-Law is not applicable to him.
2. The Authority may issue a Tax deregistration decision where it is convinced that the retention of tax registration would adversely affect the tax system's integrity, pursuant to the conditions and controls set forth in the Executive Regulations of this Decree-Law.
3. The Tax deregistration shall not invalidate the Authority's right to claim any tax due or administrative fines.

Article (22) Applying for Cancellation of Tax Registration

The registrant may submit to the Authority an application for cancellation of tax registration if the value of the taxable supplies made during the period of previous twelve months is less than the Mandatory Registration Threshold.

Article (23) Voluntary Tax Registration Cancellation

The registrant shall not be entitled, pursuant to Article (17) hereof, to submit an application for cancellation of his tax registration within twelve months as of the date of his tax registration.

Article (24) Procedures, Controls and Conditions of Tax Registration and Cancellation thereof

The Executive Regulations of this Decree-Law shall determine the procedures, controls and conditions of the tax registration, cancellation thereof and rejection of applications for tax registration and its cancellation as set forth in this Part.

Part Five: Rules on Supply
Chapter One: Date of Supply
Article (25) Date of Supply

The tax shall be calculated on the date of supply of goods or services, which shall be the earlier date of any of the following:
1. The date of transferring the goods if they are transferred under the supervision of the supplier.
2. The date on which the goods are made available to the recipient if they are not transferred under the supervision of the supplier.
3. The date on which the assembly or installation of goods is completed if there is an obligation to install and assemble the supplied goods.
4. The date on which the goods are imported in accordance with the Customs Legislation.
5. The date on which the recipient accepts the supply, or no later than twelve (12) months following the date on which the goods are transferred or made available to the recipient, if the supply id made on a returnable basis.
6. The completion date of providing the services.
7. The date of receiving the payment or the date of issuing the tax invoice.

Article (26) Date of Supply in Special Cases

1. The date of supply of Goods and Services for any contract that contains periodic payments or consecutive invoices shall be the earliest date of the following:
a. The date of issuing any tax invoice;
b. The maturity date of the amount stated in the tax invoice;
c. The date of receiving the paid amount; or
d. The date on which a year has lapsed following the date of supplying the goods or services.
2. The date of supply, in cases where payment is made through vending machines, shall be the date on which the amount is collected from such machines.
3. The date of Deemed Supply of Goods or Services shall be the date of their supply, disposal thereof, change of their use purposes or Tax deregistration, as the case may be.
4. The date of supply of Vouchers shall be the date of their issuance or supply thereafter.

Chapter Two: Place of Supply
Article (27) Place of Supply of Goods

1. The place of supply of Goods shall be in the State if such supply is made in the State and does not involve Exportation from or Importation into the State.
2. The place of supply of installed or assembled Goods if exported from or imported to the State shall be:
a. In the State if such Goods are assembled or installed in the State.
b. Outside the State if such Goods are assembled or installed outside the State.
3. The place of supply of Goods that involves Exportation or Importation shall be as follows:
a. Inside the State in the following cases:
i. If the supply involves Exportation to a place outside the Applying States;
ii. If the Recipient of Goods in an Applying State is not registered for the Tax in the state of destination, and the total exports from the same supplier to such state does not exceed the Mandatory Registration Threshold of such state;
iii. If the Recipient of Goods does not have a Tax Registration Number in the State and the total exports from a supplier in an Applying State to the State exceeds the Mandatory Registration Threshold; and
iv. If Article (26.1) above is applicable and the title to Goods is transferred inside the State.
b. Outside the State in the following cases:
i. If the supply involves Exportation to a customer registered for the Tax purposes in one of the Applying States.
ii. If the Recipient of Goods is not registered for the Tax purposes in one of the applying state to which Exportation is made, and the total exports from the same supplier to such state exceeds the Mandatory Registration Threshold of such state.
iii. If the Recipient of Goods does not have a Tax Registration Number and imports Goods from a supplier registered for the Tax in an Applying State from which importation is made, and the total imports from the same supplier to the State do not exceed the Mandatory Registration Threshold.
4. Goods shall not be treated as exported outside the State and then re-imported thereto if such Goods are supplied in the State and the supply requires sending the Goods outside the State and then the re-entry thereof into the State, as per the cases defined by the Executive Regulations of this Decree-Law.

Article (28) Place of Supply of Water and Energy

1. The supply of water and types of energy defined by the Executive Regulations of this Decree-Law through a distribution system, shall be deemed to be made in the place of residence of the taxable trader if the distribution is carried out by a taxable person whose place of residence in the State to a taxable trader whose place of residence in an applying state.
2. The supply of water and types of energy defined by the Executive Regulations of this Decree-Law through a distribution system, shall be deemed to be made at the place of actual consumption if the distribution is carried out by a taxable person to a non-taxable person.

Article (29) Place of Supply of Services

The place of supply of services shall be the place of residence of the supplier.

Article (30) Place of Supply in Special Cases

Notwithstanding the provisions of Article (29) of this Decree-Law, the place of supply in special cases shall be as follows:
1. If the Recipient has a place of residence in an Applying State and is registered for the tax purposes therein, the place of supply shall be the place of residence of the Recipient.
2. If the Recipient is a Person practicing the Business and has a place of residence in the State, and the supplier does not have a place of residence in the State, the place of supply shall be in the State.
3. In case of the supply of Services related to Goods, such as the Services of installation related to Goods supplied by others, the place of supply shall be the place where such Services are performed.
4. If the supply is leasing means of transport to a lessee who is a Untaxable Person in the State and does not have a Tax Registration Number in an Applying State; the place of supply shall be the place where such means of transport are made available to the lessee.
5. In case of the supply of restaurant, hotel, and food and drink catering services; the place of supply shall be the place where such Services are actually performed.
6. In case of the supply of any cultural, artistic, sporting or educational Services or any similar Services; the place of supply shall be the place where such services are performed.
7. In case of the supply of Services related to a real property, as determined by the Executive Regulations of this Decree-Law, the place of supply shall be the place where such real property is located.
8. In case of the supply of transport Services or transport-related services, the place of supply shall be where the transport starts. The Executive Regulations of this Decree-Law shall determine the place of supply of transport services if the trip includes more than one stop.

Article (31) Place of Supply of Telecommunication and Electronic Services

1.The place of supply of telecommunications and electronic services stated in the Executive Regulations of this Decree-Law shall be as follows:
a. Inside the State, if such services are used and enjoyed therein, to the extent of such use and enjoyment.
b. Outside the State, if such services are used and enjoyed outside the State, to the extent of such use and enjoyment.
2.The actual use and enjoyment of telecommunications and electronic services shall be where such services are used regardless of the place of contract or payment.

Chapter Three: Place of Residence
Article (32) Business Establishment

The place of residence of the supplier or recipient shall be as follows:
1. The state where the business establishment of the person is located or where he has a fixed establishment, provided that he does not have a business establishment or fixed establishment in any other state.
2. The state where the business establishment of the person is located or where he has a fixed establishment, which is the most directly concerned with the supply if the business establishment is located in more than one state or he has fixed establishments in more than one state.
3. The state where the usual place of residence of the person is located if he has no business establishment or fixed establishment in any state.

Article (33) Agents

The Place of Residence of the agent shall be the Place of Residence of the principal in the following cases:
1. If the agent exercises, on a regular basis, the right of negotiation and entering into agreements on behalf of the principal.
2. If the agent keeps a stock of Goods to fulfill agreements for the supply thereof in favour of the principal regularly.

Chapter Four: Value of Supply
Article (34) Value of Supply

The value of any supply of goods or services for a consideration shall be as follows:
1. Where the supply is for a cash consideration in whole, the value of the supply shall be the consideration less the tax.
2. Where the supply is for a consideration not in cash or a consideration not wholly in cash, the value of the supply shall be calculated as the overall cash part plus the market rate of the non-cash part of the consideration, and shall not include the tax.
3. In case of services received by the taxable person who is required to calculate the tax in accordance with Clause (1) of Article (48) of this Decree-Law, the value of the supply shall be equal to the market rate of the consideration without addition of the tax chargeable on such supply.
4. If the consideration is related to matters other than the supply of goods or services, the supply shall be deemed to be for the part of the consideration as is properly attributable to the supply as determined in the Executive Regulations of this Decree-Law.
The Executive Regulations of this Decree-Law shall determine the rules of defining the market rate.

Article (35) Importation Value

The value of imported goods shall consist of:
1. The value of the goods for the customs purposes in accordance with the Customs Legislation, including the value of insurance, freight, any customs duties and any excise taxes to be paid on the importation of goods. The tax shall not be included in the value of supply.
2. If it is not possible to determine the value of supply according to Clause (1) of this Article, the value shall be determined based on the alternate valuation rules set forth in the Customs Legislation.

Article (36) Value of Supply and Deemed Supply for Related Parties

Notwithstanding the provisions of Articles (34), (35) and (37) of this Decree-Law, the value of the supply or Importation of Goods or Services between the Related Parties shall be considered equal to the market rate if all the following conditions are fulfilled:
1. The value of the supply is less than the market rate.
2. If the supply is taxable and the Recipient of Goods or Recipient of Services is not entitled to recover the full Tax to be levied on such supply as an Input Tax.

Article (37) Value of Deemed Supply

Notwithstanding the provisions of Articles (34) and (35) of this Decree-Law, in case of the deemed supply, when the taxable person purchases goods or services to make taxable supplies but he does not use the same for such purpose, the value of the supply shall be equal to the total cost incurred by the taxable person to make such deemed supply of goods or services.

Article (38) Tax-Inclusive Prices

The declared prices shall include the tax in case of the taxable supplies. The Executive Regulations of this Decree-Law shall determine the cases where prices do not include the tax.

Article (39) Value of Supply in case of Discount or Subsidies

When discounts are made prior to or after the date of supply or subsidies are provided by the State to the supplier for such supply, the value of such supply shall be reduced in proportion to such discounts or subsidies.
The Executive Regulations of this Decree-Law shall establish the conditions and rules of calculating the tax when the discount is made.

Article (40) Value of Supply of Vouchers

The value of the supply of any voucher shall be the difference between the consideration received by the supplier of the voucher and the declared cash value of the voucher.

Article (41) Value of Supply of Postage Stamps

The value of the supply of postage stamps that enables the user to use the postal services in the State shall be the amount shown on the postage stamp.

Article (42) Temporary Transfer of Goods

If the goods are transferred temporarily from the local markets to a designated area or outside the State to complete their manufacture or their repair for the purpose of re-importing the same to the State, the value of the supply, when re-imported, shall be the value of the services performed.

Chapter Five: Profit Margin
Article (43) Levying the Tax based on the Profit Margin

1. The registrant may, in any specific tax period, calculate and charge the tax on the basis of the profit margin earned on the taxable supplies determined in the Executive Regulations of this Decree-Law and not on the basis of the value of such supplies, and shall notify the Authority thereof.
2. The Executive Regulations of this Decree-Law shall establish the conditions to be met for the application of the provisions of this Article.

Part Six: Zero Rate and Exemptions
Chapter One: Zero Rate
Article (44) Zero-Rated Supply and Importation

The supply and importation of goods and services specified in this Chapter made by the taxable person shall be a zero–rated supply.

Article (45) Zero-Rated Goods and Services

The zero rate shall apply to the following Goods and Services:
1. The direct or indirect Exportation to outside the Applying States, as determined by the Executive Regulations of this Decree-Law.
2. Services of international transport of passengers and Goods, which starts or ends in the State or passes through its territories, including Services related to such transport.
3. The air passenger transport inside the State if such transport is deemed to be "international carriage" in accordance with Article (1) of the Warsaw Convention for the Unification of Certain Rules Relating to International Carriage by Air signed in 1929.
4. The supply or Importation of air, sea and land means of transport used to transport passengers and Goods in accordance with the classification and conditions set forth in the Executive Regulations of this Decree-Law.
5. The supply of Goods or Services or the Importation of Relevant Goods related to the means of transport set out in Clause (4) of this Article, which are designated for the operation, repair, maintenance or transformation thereof.
6. The supply or Importation of rescue aircraft and salvage ships for rescue and assistance by air or sea.
7. The supply of Goods and Services related to Services of the transport of Goods or Passengers aboard land, air or sea means of transport, in accordance with the provisions of Clauses (2) and (3) of this Article, which are designated for consumption on board; or anything consumed by any means of transport, any installations or addition thereto or any other use during the transport process.
8. The supply or importation of investment precious metals for investment purposes. The Executive Regulations of this Decree-Law shall determine the precious metals and the standards based on which they are deemed to be investment.
9. The first supply of residential buildings within (3) years, as of the date of completion of construction, either through selling or leasing the same in whole or in part, in accordance with the rules established by the Executive Regulations of this Decree-Law.
10. The first supply of buildings designed specifically to be used by Charities through selling or leasing the same, in accordance with the rules established by the Executive Regulations of this Decree-Law.
11. The first supply of buildings transformed from non-residential buildings to residential ones through selling or leasing the same, in accordance with the conditions laid down in the Executive Regulations of this Decree-Law.
12. The supply or importation of crude oil and natural gas.
13. The supply of educational services and Related Goods and Services for nurseries, preschool, elementary education, and higher educational institutions owned or funded by the federal or local government, as determined by the Executive Regulations of this Decree-Law.
14. The supply of preventive and basic health care services and Related Goods and Services, as determined by the Executive Regulations of this Decree-Law.

Chapter Two: Exemptions
Article (46) Exempted Supply

The following supplies shall be exempted from the tax:
1. Financial services as specified in the Executive Regulations of this Decree-Law.
2. The supply of residential buildings through selling or leasing the same, except for those zero-rated in accordance with Clauses (9) and (11) of Article (45) of this Decree-Law.
3. The supply of vacant lands.
4. The supply of local passenger transport.
The Executive Regulations of this Decree-Law shall establish the conditions and controls for exempting the supplies mentioned in the preceding Clauses from the tax.

Chapter Three: Single Supply and Mixed Supplies
Article (47) Exempted Supply

The Executive Regulations of this Decree-Law shall establish the controls for determining the tax treatment of any supply composed of more than one component for a single price, if each component is subject to a different tax treatment.

Chapter Four: Special Obligations for Calculating the Tax
Article (48) Reverse Charge

1. Where Taxable Person imports the concerned goods or the concerned services for the purposes of its business, the Taxable Person shall be deemed to have made a taxable supply to itself, and shall be responsible for calculating the tax due on such supply and for complying with all other related tax obligations arising therefrom, except for issuing a tax invoice to itself.

2. Notwithstanding the provisions of Clause (1) of this Article, in case that the final destination of the Goods when entering the State is another Applying State, the Taxable Person shall pay the Due Tax on Importation of relevant Goods according to the mechanism specified in the Executive Regulations of this Decree-Law.
3. If a Registrant makes a taxable supply in the State of any crude or refined oil, unprocessed or processed natural gas or Pure Hydrocarbons to another Registrant and the Recipient of Goods intends to either resell the purchased Goods as crude or refined oil, unprocessed or processed natural gas or Pure Hydrocarbons, or use the same to produce or distribute any type of energy, the following rules shall apply:
a. The Registrant making the supply shall not charge the Tax on the value of the supply of Goods stated in this Paragraph.
b. The Recipient of Goods shall calculate the Tax on the value of Goods supplied thereto and shall be responsible for all Tax obligations and calculating the due tax thereon.
4. The provisions of Clause (3) of this Article shall not apply to any of the following cases:
a. If the Recipient of such Goods fails, before the date of supply, to submit a written confirmation to the supplier that his acquisition of the Goods is for the purpose of resale or to be used for producing and distributing any type of energy.
b. If the Recipient of such Goods fails, before the date of supply, to submit a written confirmation to the supplier that he is a Registrant and the supplier fails to verify the Tax Registration of the Recipient of such Goods by the means approved by the Authority, in accordance with the data contained in the confirmation.
c. If the taxable supply is zero-rated, in accordance with Clause (1) of Article (45) of this Decree-Law.
d. If the taxable supply includes a supply of Goods or Services other than the Goods set out in Clause (3) of this Article.
5. If the Recipient of any Goods of crude or refined oil, unprocessed or processed natural gas, or Pure Hydrocarbons confirms in writing to the supplier that he is a Registrant for the purposes of applying Clause (3) of this Article, the following shall apply:
a. The supplier shall not be responsible for calculating the tax related to the supply unless he knows or is supposed to know that the Recipient is not a Registrant on the date of supply.
b. The recipient shall be obligated to calculate the Due Tax for the supply.
6. If the supplier mentioned in Paragraph (a) of Clause (5) of this Article is supposed to know that the Recipient of Goods is not registered for tax purposes on the date of supply, the supplier and Recipient of Goods shall be jointly and severely liable for the Due Tax and relevant fines in relation to the supply.
7. The Executive Regulations of this Decree-Law shall determine the following:
a. Conditions and cases of applying the mechanism set out n Clause (1) of this Article.
b. Additional duties related to record keeping for calculation of the Tax according to the mechanism set out in Clause (1) of this Article.
c. The Cabinet may issue a resolution identifying other Goods or Services that are subject to the reverse charge mechanism, along with identifying terms and conditions related thereto.

Article (49) Importation of Relevant Goods

The person other than the registrant shall pay the due tax on the importation of relevant goods from outside the applying states at the date of importation according to the payment mechanism specified by the Executive Regulations of this Decree-Law.

Chapter Five: Designated Areas
Article (50)

The "Designated Area" that meets the conditions established in the Executive Regulations of this Decree-Law shall be treated as being outside the State.

Article (51)

1. Goods may be transferred from one designated area to another designated area without any tax due thereon.
2. The Executive Regulations of this Decree-Law shall determine the procedures and conditions for the transfer of goods from and to a designated area and the method of maintaining, storing and processing such goods therein.

Article (52) Exceptions for Designated Areas

Notwithstanding the provisions of Article (50) of this Decree-Law, the Executive Regulations of this Decree-Law shall establish the conditions under which the business practiced in the designated areas shall be deemed to be practiced inside the State.

Part Seven: Calculation of the Due Tax
Chapter One: Due Tax for a Tax Period
Article (53) Calculation of the Payable Tax

The payable tax for any tax period shall be calculated as being equal to the total output tax payable in accordance with the provisions of this Decree-Law, made during the tax period less the total refundable input tax by the taxable person during the same tax period.

Article (54) Refundable Input Tax

1. The input tax that is refundable by the taxable person for any tax period shall be the total sum of the input tax paid for goods and services used or intended to be used for making any of the following:
a. Taxable Supplies;
b. Supplies to be made outside the State when being taxable supplies if they are made in the State.
c. Supplies specified in the Executive Regulations of this Decree-Law that are made outside the State, and would have been treated as exempted from the tax if they are made inside the State.
2. If a taxable person imports goods through another applying state and the intended final destination of such goods is the State at the time of importation, the taxable person shall be entitled to treat the tax paid for importation of goods to the applying state as a refundable input tax under the conditions specified in the Executive Regulations of this Decree-Law.
3. If a taxable person transfers goods to the State after being imported thereto in an applying state, the taxable person shall be entitled to treat the tax paid for the goods in the applying state as a refundable input tax subject to the conditions specified in the Executive Regulations of this Decree-Law.
4. The taxable person shall not be entitled to recover the input tax in respect of the tax paid in accordance with Clause (2) of Article (48) of this Decree-Law.
5. The Executive Regulations of this Decree-Law shall determine the cases where the input tax is excepted from being refunded.

Article (54) BIS

1. The Authority shall reject the deduction of recoverable input tax if it is established that the supply in respect of which the deduction is claimed was part of a supply or a chain of supplies connected with tax evasion, and that the Taxable knew of such connection at the time of deducting the recoverable input tax.
2. The Authority may reject the deduction of recoverable input tax if it is established that the supply in respect of which the deduction is claimed was part of a supply or a chain of supplies connected with tax evasion, and that, having regard to the circumstances of the supply, the Taxable Person should have known of such connection.
3. For the purposes of applying the provisions of Clause (2) of this Article, a Taxable Person shall be deemed to have been required to know that the supply was part of a supply or a chain of supplies connected with tax evasion where the Taxable Person failed to verify the validity and integrity of the supplies received prior to deducting input tax, in accordance with the measures, procedures, and conditions determined by the Authority in this regard.

Article (55) Refund of Refundable Input Tax in the Tax Period

1. Subject to the provisions of Article (56) of this Decree-Law, the refundable input tax may be deducted under the tax return relating to the first tax period in which the following conditions are met:
a. Fulfillment of any of the following cases:
1. The taxable person receives and keeps the tax invoice in accordance with the provisions of this Decree-Law, provided that the tax invoice contains the details of the supply related to the input tax, or keeps any other document pursuant to Clause (3) of Article (65) of this Decree-Law in respect of the supply or importation for which the input tax has been paid.
2. The taxable person imports the goods, receives and keeps the invoices and import documents in accordance with the provisions of this Decree-Law and its Executive Regulations, in respect of the import transaction for which the input tax has been paid or an input tax return has been submitted.
3. The taxable person imports the goods, receives and keeps the invoices and import documents in accordance with the provisions of this Decree-Law and its Executive Regulations, in respect of the import transaction for which the input tax return has been submitted.
b. The taxable person pays the consideration or any part thereof, as determined by the Executive Regulations of this Decree-Law.
c. The taxable person shall keep the tax invoice according to the e-invoicing system, wherever required to be issued, or where already issued, as an electronic invoice.
d. Any other requirements determined by a Cabinet Resolution based on the Minister’s proposal.
2. If the taxable person entitled to recover the input tax fails to do the recovery during the tax period in which the conditions stated in Clause (1) of this Article are met, they may include the refundable input tax in the tax return for the subsequent tax period.

Article (56) Input Tax Paid before the Tax Registration

1. The registrant may recover the refundable input tax paid before the tax registration under the tax return submitted for the first Tax Period following the tax registration, paid for all of the following:
a. Supply of goods and services made to him prior to the date of tax registration.
b. Importation of goods by him prior to the date of tax registration. on the condition that such goods and services are used to make supplies that give the right to refund after the tax registration.
2. Notwithstanding the provisions of Clause (1) of this Article, the input tax may not be refunded in any of the following cases:
a. Receiving goods and services for purposes other than making taxable supplies.
b. The input tax related to the depreciated part of the Capital Assets before the date of tax registration.
c. If the services are received more than five years prior to the date of tax registration.
d. If a person transfers the goods to an applying state prior to the tax registration in the State.

Article (57) Refund of Tax by Government Agencies and Charities

1. Without prejudice to the general provisions o input tax refund, a Cabinet resolution, to be issued upon the proposal of the Minister, shall determine the Government Agencies and Charities entitled to recover the full amount of the input Tax according to the following:
a. The Input Tax paid by the Government Agency for the purposes of its sovereign activities.
b. The Input Tax paid by the Charity for the purposes of its relevant Charitable Activity.
2. Notwithstanding the provisions of Clause (1) above, the following shall be excluded from the refund:
a. The Tax excluded from refund, in accordance with the provisions of the Executive Regulations of this Decree-Law.
b. The Tax paid for Goods and Services used to make exempted supplies.

Chapter Two: Apportionment and Adjustment of the Input Tax
Article (58) Calculating the Refundable Input Taxا

The Executive Regulations of this Decree-Law shall specify the method in which the refundable input tax is calculated, if the input tax is paid for goods or services during a specific tax period to make supplies that give the right to refund pursuant to the provisions of Article (54) and other supplies that do not give the right to refund, or for activities performed not in the course of practicing the business.

Article (59) Conditions and Mechanism of Input Tax Adjustment

The Executive Regulations of this Decree-Law shall determine the conditions and mechanism for adjusting the input tax in the following cases:
1. If the taxable person attributes the Input Tax, either fully or partially, to make Taxable Supplies, but changed the use, or the intended use, of those Goods or services prior to making the Taxable Supplies.
2. If the taxable person attributes the Input Tax, either fully or partially, to make Exempt Supplies, or for activities that do not fall within the conduct of Business, but changed the use or the intended use of the those goods or services related to the Input Tax prior to making Exempt Supplies.

Chapter Three: Capital Assets Scheme
Article (60) Capital Assets Scheme

1. If a capital asset is supplied or imported by a taxable person, the latter shall assess the period of use of such asset and make the necessary adjustments to the Input Tax paid pursuant to the Capital Assets Scheme.
2. A taxable person shall keep the records related to capital assets for at least ten years.
3. The Executive Regulations of this Decree-Law shall determine the following:
a. Capital assets subject to the provisions of this Decree-Law and their estimated useful life.
b. The method of adjusting capital assets and the periods for which adjustments should be made.
c. The cases where the period for keeping records of capital asset records is extended.

Chapter Four: Adjustment of Tax after the Supply Date
Article (61) Cases and Conditions for Output Tax Adjustments

1. The Registrant shall adjust the output Tax after the date of supply in any of the following cases:
a. If the supply is cancelled.
b. If the Tax treatment of the supply is changed due to a change in the nature of the supply.
c. If the previously agreed Consideration for the supply is altered for any reason whatsoever.
d. If the Recipient of Goods or Recipient of Services returned them to the Registrant in full or in part and the Consideration is returned in full or in part.
e. If the tax is levied or tax transaction is applied erroneously.
2. Paragraph (e) of Clause (1) of this Article shall not apply where the place of supply was treated by the supplier on the date of supply as being subject to Clause (1) of Article (27), but, as a result of a movement of the Goods, it turned out that it should have been treated as a supply place under paragraph (b/1) of Clause (3) hereof.
3. In order to adjust the output Tax, any of the following conditions shall be met:
a. If the output Tax amount charged on the supply stated in the Tax Invoice does not match the Tax that shall actually be charged on the supply as a result of any of the cases mentioned in Clause (1) of this Article.
b. If the Registrant submits a Tax Return for the tax period during which the supply occurred and an amount was incorrectly calculated as being the amount of the output Tax due for this supply as the result of any of the cases mentioned in Clause (1) of this Article.

Article (62) Mechanism for Output Tax Adjustment

The output tax shall be adjusted according to the following:
1. If the output Tax due for the supply exceeds the output Tax calculated by the Registrant, the Registrant shall issue a new Tax Invoice and shall calculate the additional amount of the Payable Tax during the period which such an increase was identified.
2. If the output Tax calculated by the Registrant exceeds the output Tax which should have been charged on the supply, the Registrant shall issue a Tax Credit Note according to the provisions of this Decree-Law, not later than (14) fourteen days of the date on which any of the cases set out in Clause (1) of Article (61) hereof occurs.

Article (63) Adjustment due to the Issuance of Tax Credit Notes

Without prejudice to Clause (2) of Article (62) of this Decree-Law, if the registrant issues a Tax Credit Note to correct output tax charged to the recipient of goods or recipient of services, the tax stated in the Tax Credit Note shall be considered as:
1. A reduction of the output tax for the registrant of this tax credit note.
2. A reduction of the Input Tax by the recipient of goods or recipient of services for the Tax Period during which the tax credit note was received.

Article (64)

1. The registered supplier may reduce the output tax in a current tax period to adjust the output tax paid for any previous tax period if all of the following conditions are met:
a. Goods and services are supplied and the due tax is charged and paid.
b. The consideration for the supply is written off in full or part as a bad debt in the accounts of the supplier.
c. The lapse of more than six (6) months following the date of supply.
d. The registered supplier notifies the recipient of goods and recipient of services of the amount of consideration for the supply that has been written off.
2. The registered recipient of goods or recipient of services shall reduce the refundable input tax for the current tax period related to a supply received during any previous tax period where the consideration has not been paid and all of the following conditions are met:
a. The registered supplier reduced the output tax as stated in Clause (1) of this Article and the recipient of goods and the recipient of Services has received a notification from the supplier of the Consideration being written off.
b. The recipient of goods and recipient of services received the Goods and services and the relevant Input Tax was deducted.
c. The Consideration was not paid in full or in part for the supply for over (6) six months.
3. The reduction stated in Clause (1) and (2) shall be equal to the Tax related to the consideration which has been written off according to paragraph (b) of Clause (1) of this Article.

Chapter Five: Tax Invoices
Article (65) Conditions and Requirements for Issuing Tax Invoice

1. The Registered supplier shall, when making a taxable supply, issue an original tax invoice and deliver it to the recipient of goods or services.
2. The Registered supplier shall, when making a deemed supply, issue an original tax invoice and deliver it to the recipient of goods or services, if any, or keep it in their records if there is no recipient of goods or services.
3. The Executive Regulations of this Decree-Law shall determine the following:
a. The data to be included in the tax invoice.
b. The conditions and procedures necessary for the issuance of an electronic tax invoice.
c. The cases where the registered supplier is not required to issue and deliver a tax invoice to the recipient of goods or services.
d. The cases where other documents may be issued in lieu of the tax invoice, the conditions thereof and the data to be contained therein.
e. The cases where a person may issue a tax invoice on behalf of the registered supplier.
4. Any person, who receives an amount as a tax or issues in respect thereof a tax invoice, shall pay such amount to the Authority, and the same shall receive the same treatment of the tax due under the provisions of this Decree Law.
5. For the purposes of this Article, the registered supplier, who is subject to the e-invoicing system, shall pay and submit the tax invoices in an electronic format invoice, according to the -invoicing system.

Article (66) Document of Supply to an Applying State

Subject to the provisions of Article (65) of this Decree-Law, each registrant who supplies goods or services considered to be supplied in any of the applying states, shall deliver to the recipient of goods and services a document containing all the information to be stated in the tax invoice and any other data as specified in the Executive Regulations of this Decree-Law, provided that such document is not titled "Tax Invoice" and does not contain any levied tax amount.

Article (67) Date of Issuance of Tax Invoices

1. The Registrant shall issue the Tax Invoice within (14) days as of the date of the supply set forth in Article (25) and (26) of this Decree-Law.
2. The Executive Regulations of this Decree-Law shall identify the cases that are subject to time limits other than the ones stated in Clause (1) above, or cases where the Tax Invoice shall be promptly issued, as per the controls set forth therein.

Article (68) Rounding in Tax Invoices

For the purposes of determining the tax stated in the tax invoice, the Executive Regulations of this Decree-Law shall define the method of calculation and the total value to be paid if the tax is less than one fils of a UAE Dirham.

Article (69) Currency Used in Tax Invoices

For the purposes of the tax invoice, if the supply is made in a currency other than the UAE Dirham, the amount stated in the tax invoice shall be converted into the UAE Dirham according to the exchange rate approved by the Central Bank in the State at the date of the supply.

Chapter Six: Tax Credit Notes
Article (70) Conditions and Requirements for Issuing Tax Credit Note

1. The Registered Supplier shall issue an original tax credit note when there is a reduction of the output tax on any supply made thereby pursuant to the provisions of Clause (2) of Article (62) of this Decree-Law and shall deliver the same to the recipient of goods or services.
2. The Registered Supplier shall, when making a deemed supply, issue an original tax credit note if there is a reduction of the output tax on such supply pursuant to the provisions of Article (61) of this Decree-Law, and shall keep the same in its records.
3. The Executive Regulations of this Decree-Law shall determine the following:
a. The basic data to be included in the tax credit note in cases where the taxable person is obligated to issue such a note.
b. The conditions and procedures necessary for the issuance of an electronic tax credit note.
c. The cases where the Registered Supplier is not required to issue and deliver a tax credit note to the recipient of goods or services.
d. The cases where other documents may be issued in lieu of the tax credit note, the conditions thereof and the data to be included therein.
e. The cases where a person may issue a tax credit note on behalf of the registered supplier.
4. For the purposes of this Article, the registered supplier, who is subject to the e-invoicing system, shall issue and deliver a tax credit note as an electronic credit note, according to the e-invoicing system.

Part Eight: Tax Period, Tax Returns, Tax Payment and Refund of Tax
Chapter One: Tax Period
Article (71) Duration of the Tax Period

The Executive Regulations of this Decree-Law shall determine the tax period for which the taxable person shall calculate and pay the tax and the exceptional cases in which the Authority may amend the tax period.

Chapter Two: Tax Returns and Payment of the Tax
Article (72)

1. The taxable person shall submit to the Authority the tax return at the end of each tax period, within the time limits and in accordance with the procedures determined by the Executive Regulations of this Decree-Law to declare all the supplies made or received during such period.
2. The government agencies that may submit simplified tax returns to the Authority shall be determined by a Cabinet resolution issued upon the recommendation of the Minister.

Article (73) Payment of the Tax

The Executive Regulations of this Decree-Law shall determine the time limits and procedures for payment of the tax shown in the tax return as payable in accordance with the provisions of this Decree-Law.

Chapter Three: Carrying forward the Excess of Refundable Tax and Tax Refund
Article (74) Excess Refundable Tax

1. Notwithstanding the provisions of the Executive Regulations of this Decree-Law, the taxable person shall carry forward any excess of the refundable tax to the subsequent tax periods and offset such excess against the payable tax or any administrative fines imposed pursuant to the provisions of this Decree-Law or Federal Law No. (7) of 2017 on Tax Procedures in the subsequent tax periods until such excess is fully utilized, in the following cases:
a. If the refundable input tax of the taxable person, pursuant to this Decree-Law, exceeds the payable output tax for the same tax period.
b. If the tax paid by the taxable person to the Authority exceeds the payable tax in accordance with the provisions of this Decree-Law, other than the case referred to in paragraph (a) of Clause (1) of this Article.
2. If there is any excess for any tax period after being carried forward for a period of time, the taxable person may submit to the Authority an application for requesting the refund of such excess. The Executive Regulations of this Decree-Law shall determine the time limits, procedures and mechanisms of returning any remaining excess to the taxable person.
3. If no application is submitted to refund the surplus after offsetting, the surplus shall be carried forward to subsequent tax periods for a period not exceeding five (5) years from the end of the tax period in which it arose. If no refund application is submitted for the surplus, or if it is not used to settle any tax liabilities before the expiry of such period, the right to claim it shall lapse, and it may not be used to settle any tax liabilities.

Chapter Four: Further Provisions on Tax Refund
Article (75) Tax Refund in Special Cases

The Authority may, according to the conditions, rules and procedures set forth in the Executive Regulations of this Decree-Law, refund the tax paid for any supply or importation made by any of the following:
1. A national of the State with regard to the goods and services related to the construction of a new house, which is not part of the person's business.
2. A non-resident person in the State or an applying state, who practices the business and is not a taxable person.
3. A non-resident person with regard to the goods supplied for him in the State that will be exported.
4. Foreign governments, international organizations, diplomatic bodies and missions in accordance with the conventions to which the State is a party.
5. Any persons or categories to be determined under a Cabinet resolution, upon the proposal of the Minister.

Part Nine: Violations and Penalties
Article (76) Administrative Fine Assessment

Without prejudice to the provisions of the Tax Procedures Law, the Authority shall issue an Administrative Fine Assessment to the Person and notify him thereof within five (5) working days as of the date of issuance, in any of the following cases:
1. Failure by the Taxable Person to display the tax-inclusive prices, in accordance with the provisions of Article (38) of this Decree-Law;
2. Failure by the Taxable Person to notify the Authority of applying the Tax based on the margin, in accordance with the provisions of Article (43) of this Decree-Law;
3. Failure to adhere to the conditions and procedures to be followed for keeping the Goods in a designated area or moving them to another designated area;
4. Failure of the taxable person to issue the tax invoice or a substitute document when making any supply within the time limit prescribed by law.
5. Failure of the taxable person to issue a tax credit note or a substitute document within the time limit prescribed by law.
6. Failure by the Taxable Person to comply with the conditions and procedures related to the issuance of the Tax Invoice and the Tax Credit Note electronically.

Article (77) Tax Evasion

Without prejudice to the Tax Evasion cases set forth in the Tax Procedures Law, if it is proved that a Person who is not a Registrant acquires Goods in accordance with Clause (3) of Article (48) of this Decree-Law, and claims that he is a Registrant, he shall be deemed to have committed a Tax evasion and shall be punished in accordance with the provisions of the Tax Procedures Law.

Part Ten: General Provisions
Article (78) Record Keeping

Without prejudice to the provisions related to record keeping contained in any other law, every taxable person shall keep the following documents:
a. Records of all supplies or importation of goods and services;
b. All tax invoices and substitute documentation related to the receipt of goods or services;
c. All tax credit notes and substitute documentation received;
d. All tax invoices and substitute documentation issued;
e. All tax credit notes and substitute documentation issued;
f. Records of goods and services that have been disposed of or used for matters not related to the business, referring to the tax paid for the same;
g. Records of goods and services purchased and for which the input tax has not been deducted;
h. Records of goods and services exported;
i. Records of adjustments and corrections made to the accounts and tax invoices.
j. Records of any taxable supplies made or received in accordance with Clause (3) of Article (48) of this Decree-Law, including any declarations submitted or received with regard to such taxable supplies;
k. A tax record containing the following data:
a. The due tax on the taxable supplies;
b. The due tax on the taxable supplies according to the mechanism set out in Clause (1) of Article (48) of this Decree-Law;
c. The due tax after the correction or amendment of an error;
d. The refundable tax for the supplies or importation;
e. The refundable tax after the correction or amendment of an error. The Executive Regulations of this Decree-Law shall determine the following:
a. Periods, rules and conditions for keeping the records set forth in Clause (1) of this Article.
b. Rules and procedures for maintaining the confidentiality of the records to which the Authority may have access in the case of the government agencies mentioned in Clause (2) of Article (72) of this Decree-Law.

Article (79) Tax Registration Number

The taxable person or any person authorized in writing thereby shall mention the Tax Registration Number in each tax return, notice, tax invoice, tax credit note, any other document related to the tax and any correspondences set forth in this Decree-Law or Federal Law No. (7) of 2017 on Tax Procedures referred to above.

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Part Eleven: Final Provisions
Article (80) Transitional Provisions

1. If the supplier receives the Consideration or any part thereof or issues an invoice for Goods or Services prior to the date of entry into force of this Decree-Law, the date of supply shall be the same as the date of entry into force of the provisions of this Decree-Law in the following cases if the same is made following the date of entry into force of this Decree-Law:
a. Transferring Goods under the supervision of the supplier.
b. Placing Goods at the disposal of the Recipient.
c. Completing the assembly or installation of the Goods.
d. Issuing the customs declaration.
e. Accepting the supply by the Recipient.
2. In case of entering into an agreement prior to the date of entry into force of this Decree-Law, which is related to a complete or partial supply made following the date of entry into force of this Decree-Law and does not contain provisions on the tax chargeable on such supply, it shall be treated as follows:
a. The Consideration shall be considered inclusive of the tax if levied under this Decree-Law.
b. The Tax shall be calculated on the supply regardless of whether or not it has been taken into account when determining the Consideration for the supply.
3. The Executive Regulations of this Decree-Law shall provide for the provisions on the application of this Decree-Law to the case where the agreement is made prior to the date of entry into force of this Decree-Law, but the supply is made wholly or partly after the date of entry into force of this Decree-Law.

Article (81)

The tax revenues and administrative fines to be collected in accordance with the provisions of this Decree-Law shall be subject to sharing between the Federal Government and the Emirates Governments, pursuant to the provisions of Federal Decree-Law No. (13) of 2016 on the Establishment of the Federal Tax Authority.

Article (82) The Executive Regulations

The Cabinet shall, upon the proposal of the Minister, issue the Executive Regulations of this Decree-Law.

Article (83)

Matters not stipulated herein shall be subject to the provisions of the Tax Procedures Law.

Article (84) Repeal of Conflicting Provisions

Any text or provision inconsistent or discrepant with the provisions of this Decree-Law is hereby repealed.

Article (85) Publishing and Entry into Force

This Decree-Law shall be published in the Official Gazette and shall enter into force as of 1st January 2018.

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