Is an insurance company subject to special Corporate Tax rules?

Article 30 – General Interest Deduction Limitation Rule 1. A Taxable Person’s Net Interest Expenditure shall be deductible up to 30% (thirty percent) of the Taxable Person’s accounting earnings before the deduction of interest, tax, depreciation and amortisation (EBITDA) for the relevant Tax Period, excluding any Exempt Income under Article 22 of this Decree-Law. 2. A Taxable Person’s Net Interest Expenditure for a Tax Period is the amount by which the Interest expenditure incurred during the Tax Period, including the amount of any Net Interest Expenditure carried forward under Clause 4 of this Article, exceeds the taxable Interest income derived during that same period. 3. The limitation under Clause 1 of this Article shall not apply where the Net Interest Expenditure of the Taxable Person for the relevant Tax Period does not exceed an amount specified by the Minister. 4. The amount of Net Interest Expenditure disallowed under Clause 1 of this Article may be carried forward and deducted in the subsequent (10) ten Tax Periods in the order in which the amount was incurred, subject to Clauses 1 and 2 of this Article. 5. Interest expenditure disallowed under any other provision of this Decree-Law shall be excluded from the calculation of Net Interest Expenditure under Clause 2 of this Article. 6. Clauses 1 to 5 of this Article shall not apply to the following Persons: a. A Bank. b. An Insurance Provider. Federal Decree-Law No. 47 of 2022 and its amendments – Unofficial translation (as published by the Ministry of Finance) 37 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 there is an obligation on them under applicable accounting standards for their financial statements to be consolidated.

Article 8 – Conditions to Elect the Use of the Realisation Basis 1. For the purposes of Clause 3 of Article 20 of the Corporate Tax Law, a Taxable Person that prepares Financial Statements on an Accrual Basis of Accounting may elect to recognise gains and losses on a realisation basis, subject to the provisions of Clause 2 of this Article. 2. Banks and Insurance Providers that are Taxable Persons and that prepare Financial Statements on an Accrual Basis of Accounting may elect to recognise gains and losses only on a realisation basis in accordance with paragraph (b) of Clause 3 of

11.3. Impact of a Tax Group that includes Banks and Insurance Providers The General Interest Deduction Limitation Rule does not apply to Banks, Insurance Providers and certain other specified Taxable Persons.289 Where a member of a Tax Group is a Bank or Insurance Provider, any income or expenditure of such member shall be disregarded for the calculation of total Net Interest Expenditure and EBITDA of the Tax Group.290 289 Article 30(6) of the Corporate Tax Law. 290 Article 12(5) of Ministerial Decision No. 126 of 2023. Corporate Tax Guide | Tax Groups | CTGTGR1 91

8. Exceptions to General Interest Deduction Limitation Rule 8.1. Overview Considering Taxable Persons in different sectors may have different capital needs and risk profiles, the Corporate Tax Law provides an exception to the applicability of the General Interest Deduction Limitation Rule to the following:107 • Banks, • Insurance Providers, or • natural persons undertaking Business or Business Activity in the UAE, • any other Person as may be determined by the Minister (none are currently specified). This exception does not apply to treasury companies, captive insurance companies or other non-regulated financial entities that carry out quasi-banking or insurance activities, or to investment vehicles whether regulated (for example, by Securities and Commodities Authority (SCA), Dubai International Financial Center (DIFC) or Abu Dhabi Global Market (ADGM)) or not. These entities remain subject to the General Interest Deduction Limitation Rule. The General Interest Deduction Limitation Rule also does not apply to historical financial assets and liabilities with terms agreed upon before 9 December 2022 (see Section 8.4) and Qualifying Infrastructure Projects (see Section 8.5). 8.2. Banks and Insurance Providers A Bank is a Person licensed in the UAE as a bank or finance institution or an equivalent licensed activity that allows the taking of deposits and the granting of credit as defined in the applicable (non-tax) legislation of the UAE.108 An Insurance Provider is a Person licensed in the UAE 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 (non-tax) legislation of the UAE.109 Banks and Insurance Providers will typically be in a net Interest income position, which is why they are not subject to the General Interest Deduction Limitation Rule,110 but 107 Article 30(6) of the Corporate Tax Law. 108 Article 1 of the Corporate Tax Law. 109 Article 1 of the Corporate Tax Law. 110 Article 30(6) of the Corporate Tax Law. Corporate Tax Guide | Interest Deduction Limitation Rules | CTGIDL1 60