UAE - New Ministerial Decision on Participation and Foreign Permanent Establishment Exemptions

27 December 2024 – The Ministry of Finance, United Arab Emirates (UAE) has issued a new Ministerial Decision (MD) No.302 related to Corporate Tax (CT) Law provisions on Participation Exemption and Foreign Permanent Establishment Exemption. This new decision replaces the previous MD No. 116 of 2023 for tax periods commencing on or after 1 January 2025. 

The updated decision provides clarity and guidelines on these provisions, ensuring detailed understanding and compliance under CT Law. 

Key changes include:

• Additional guidance on the transfer of ownership interests.
• Clarification on participation interests meeting the minimum cost requirement of 4 million AED.
• Adjustments to taxable income when prescribed conditions are not met.
• Clarification that the Asset Test is applicable if the Participation involves a Related Party.
• Clarity on tax grouping scenarios where a liquidation loss is recognized in relation to Participation.
• Incremental guidelines on the provisions concerning the Foreign Permanent Establishment Exemption.

An in-depth alert with detailed analysis and implications will be issued soon. Stay tuned for further updates.

Contacts

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You can also contact us and submit all your queries on this email cituae@deloitte.com.