This Decision provided the initial implementing rules for the Participation Exemption under Article 23 of Federal Decree-Law No. 47 of 2022. It established core provisions, such as the definition of qualifying ownership interests, the 'subject to tax' condition requiring a minimum 9% tax rate, and an alternative AED 4 million minimum acquisition cost threshold to qualify. The Decision also outlined rules for holding companies and the treatment of related expenditures. It remains applicable only for tax periods that commenced before 1 January 2025, as it has been repealed and replaced by Ministerial Decision No. 302 of 2024.
Participation Exemption for the Purposes of Federal Decree-Law No. 47 of 2022 on the Taxation of Corporations and Businesses
Ministerial Decision No. 116 of 2023
Issued 10 May 2023 – (Effective the day after publishing in the Official Gazette)
[GTL Notes]
The Minister of State for Financial Affairs has decided:
Having reviewed the Constitution,
Federal Law No. 1 of 1972 on the Competencies of Ministries and Powers of the Ministers, and its amendments,
Federal Decree-Law No. 13 of 2016 on the Establishment of the Federal Tax Authority, and its amendments,
Federal Decree-Law No. 28 of 2022 on Tax Procedures,
Federal Decree-Law No. 47 of 2022 on the Taxation of Corporations and Businesses,
Article 1 - Definitions
Words and expressions in this Decision shall have the same meanings specified in the Federal Decree-Law No. 47 of 2022 referred to above ('Corporate Tax Law'), and the following words and expressions shall have the meanings assigned against each, unless the context otherwise requires:
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