What is a Qualifying Public Benefit Entity?

Article 9 – Qualifying Public Benefit Entity 1. A Qualifying Public Benefit Entity shall be exempt from Corporate Tax where all of the following conditions are met: a. It is established and operated for any of the following: 1) Exclusively for religious, charitable, scientific, artistic, cultural, athletic, educational, healthcare, environmental, humanitarian, animal protection or other similar purposes. 2) 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 expenditure 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 decision 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 Federal Decree-Law No. 47 of 2022 and its amendments – Unofficial translation (as published by the Ministry of Finance) 15 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 2 – Qualifying Public Benefit Entities ر الجهات المحددة ر يف الجدول المرفق بهذا تعتي.1 القرار جهات نفع عام مؤهلة ألغراض قانون رضيبة 1. The entities specified in the schedule annexed to this Decision are considered Qualifying Public Benefit Entities for the purposes of the Corporate Tax Law. ر .الشكات عىل الجهات الحكومية أن تخطر الوزارة بأي.2 ر ات تطرأ عىل جهات النفع العام الواردة ر يف تغيي 2. The Government Entities shall notify the Ministry of any changes occurring to the public benefit entities specified in the schedule annexed to this Decision that impact the entity's continuity in meeting the conditions set out in the Corporate Tax Law. The notification shall be in the form and manner prescribed by the Ministry and made within (20) twenty business days from the occurrence of any changes. الجدول المرفق بهذا القرار بما تؤثر عىل استمراريتها ر وط المنصوص عليها ر يف قانون ر يف استيفاء الش رضيبة ر ر ر أن يكون اإلخطار بالشكل ويتعي،الشكات ر ين ) عش20( الت تحددها الوزارة وخالل والطريقة ي .ر ات يوم عمل من حدوث أي تغيي

other personal pecuniary gains. It does not preclude the payment of salaries or reimbursement of expenditure to Persons and their Connected Persons involved in the establishment or operation of the entity, provided that such expenditure is necessary and priced at arm’s length. Example 5: No personal benefit condition A social charity owns a hostel for the purpose of providing free or subsidised accommodation to people in need and with limited means. The charity’s officers regularly arrange for the hostel to be used to provide free accommodation for their own friends and relatives, without consideration to whether they satisfy the charity’s criteria. As an asset of the charity, the hostel accommodation should not be available for the personal benefit of its officers. In this example, even though the officers do not directly use the accommodation, they receive an indirect personal benefit by having the charity’s assets at their disposal to do as they wish, providing benefits to individuals they choose, without regard for the stated purpose of the charity. As such, the charity is in breach of the no personal benefit condition. Accordingly, the charity would fail to be a Qualifying Public Benefit Entity. 4.1.5. Listed in a Cabinet decision The definition of Qualifying Public Benefit Entity in the Corporate Tax Law requires that in addition to meeting the conditions in Article 9 of the Corporate Tax Law, the entity must be listed in a decision issued by the Cabinet at the suggestion of the Minister. Cabinet Decision No. 37 of 2023, issued on 7 April 2023, sets out a list of entities that are to be considered as Qualifying Public Benefit Entities for the purposes of the Corporate Tax Law.10 The Cabinet has the power to amend the list in the future at the suggestion of the Minister, making either additions or deletions to it.11 4.1.6. Monitoring compliance For the purposes of monitoring compliance with the exemption requirements, the FTA may request any relevant information or records from a Qualifying Public Benefit Entity to verify that the entity continues to meet the relevant conditions to be exempt from 10 Article 2(1) of Cabinet Decision No. 37 of 2023. The entities are listed in a schedule annexed to this Decision. 11 Article 3 of Cabinet Decision No. 37 of 2023. Corporate Tax Guide | Public Benefit Entities, Pension Funds & Social Security Funds | CTGEPF1 15