UAE Corporate Tax Exemptions: What Changed in 2026?

UAE Corporate Tax Exemptions: What Changed in 2026? is an important topic for businesses, government-related entities, investment funds and organisations operating in the UAE. In September 2026, the Federal Tax Authority (FTA) introduced a new decision updating the procedures and timelines for applying for corporate tax exemptions.

The key development is FTA Decision No. 15 of 2026, which came into effect on 15 September 2026 and replaced the earlier FTA Decision No. 7 of 2023. It introduces clearer application deadlines and specific arrangements for certain exempt entities.

Below is a blog draft explaining the changes, who may qualify and what businesses should review.

UAE Corporate Tax Exemptions: Understanding the 2026 Changes

The UAE corporate tax framework provides exemptions for specific entities and organisations that meet the conditions set out in the Corporate Tax Law. However, being a government-related organisation, investment fund or non-profit organisation does not automatically mean that every entity is exempt.

The 2026 update mainly focuses on how eligible entities apply for exemption, when they must submit their applications and how applications from related entities are processed.

Businesses should understand these requirements to avoid missing important deadlines or assuming that an exemption applies without FTA approval.

1. What Is FTA Decision No. 15 of 2026?

FTA Decision No. 15 of 2026 updates the procedures for obtaining UAE corporate tax exemptions. It replaces FTA Decision No. 7 of 2023 and became effective on 15 September 2026.

The decision applies to relevant tax periods beginning on or after 1 June 2023, where exemption applications are submitted on or after its effective date.

One of its most important changes is the extension of the standard exemption application deadline from 60 to 90 business days after the end of the relevant tax period.

This gives eligible entities additional time to prepare their applications and supporting documents.

2. Which Entities Can Qualify for UAE Corporate Tax Exemptions?

Under the UAE Corporate Tax Law, certain categories of entities may qualify for exemption, subject to the applicable conditions.

These include:

• Government entities: Government entities are generally automatically exempt under the Corporate Tax Law.

• Government-controlled entities: Specified government-controlled entities may qualify for exemption where they meet the relevant requirements.

• Extractive businesses: Businesses involved in qualifying natural resource extraction activities may qualify, subject to the applicable notification and conditions.

• Non-extractive natural resource businesses: Certain businesses operating in natural resource sectors may qualify under the relevant rules.

• Qualifying public benefit entities: Organisations included in the relevant Cabinet Decision may be exempt.

• Pension and social security funds: Qualifying public or private pension and social security funds may apply for exemption.

• Qualifying investment funds: Investment funds that satisfy the relevant conditions may qualify.

• Certain wholly owned subsidiaries: Eligible subsidiaries of specified exempt entities may apply for exemption if they satisfy the ownership and control requirements.

The eligibility requirements differ between categories. Some exemptions apply automatically or through inclusion in a Cabinet Decision, while others require an application and FTA approval.

3. What Are the Main Changes Under the 2026 Decision?

The new decision introduces several important procedural changes that eligible organisations should understand.

A. Standard application deadline extended to 90 business days

Under the updated rules, eligible entities covered by the relevant provisions must apply for exemption after the end of the tax period in which they meet the exemption conditions.

The application must be submitted no later than 90 business days after the end of that tax period.

This replaces the previous standard 60-day deadline with a longer period.

Businesses should still prepare their documentation early rather than waiting until the final deadline.

B. Special deadlines for certain entities

The decision also introduces specific transitional deadlines for particular categories.

These are special provisions, not general deadlines for every business. Eligibility must be checked against the relevant decision and the entity's circumstances.

C. New application sequence for certain subsidiaries

The updated decision clarifies the application process for certain wholly owned and controlled entities.

Where a subsidiary falls within the specified categories and is controlled by an eligible exempt entity, the parent or controlling entity must submit its own exemption application first.

The subsidiary can then submit its application. The FTA will not decide the subsidiary's application until the controlling entity's exemption application has been approved.

This makes it important for corporate groups to coordinate their exemption applications and review their ownership structures before submitting documents.

D. Clarification of exemption effective dates

The decision also clarifies when an approved exemption can take effect.

Generally, an approved exemption becomes effective from the beginning of the tax period specified in the application.

However, the FTA may determine an alternative effective date in certain circumstances. These can include incorrect tax period details, changes in ownership during a tax period or situations where relevant legislation allows retrospective exemption.

Businesses should ensure that the tax periods stated in their applications are accurate and supported by appropriate records.

4. Does a Corporate Tax Exemption Mean a Free Zone Company Pays No Tax?

No. A corporate tax exemption and the 0% corporate tax rate available to a Qualifying Free Zone Person are different concepts.

A Qualifying Free Zone Person may benefit from a 0% rate on its qualifying income if it meets the conditions under the UAE Corporate Tax Law. This does not mean that every free zone company is automatically exempt from corporate tax.

Free zone businesses must review their qualifying status, income sources, activities and compliance requirements. They may also have tax obligations even when qualifying for a preferential rate.

Businesses should therefore avoid treating free zone registration as automatic corporate tax exemption.

5. What Should Businesses Do to Prepare for the 2026 Changes?

Eligible organisations should review their tax position and exemption requirements before submitting an application.

Here are five practical steps:

1. Check exemption eligibility: Identify the relevant category under Article 4 of the UAE Corporate Tax Law and confirm that all required conditions are satisfied.

2. Review corporate ownership: Check whether the organisation is wholly owned or controlled by another exempt entity and whether an application sequence applies.

3. Verify tax registration: Confirm that the entity has completed the applicable corporate tax registration requirements.

4. Prepare supporting documents: Organise ownership records, financial statements, tax period details and other documents relevant to the exemption category.

5. Track application deadlines: Identify whether the standard 90-business-day period or a special transitional deadline applies.

Organisations should also review their annual declaration requirements. Although Decision No. 15 of 2026 does not repeat the earlier annual declaration provision, the relevant annual filing obligation continues under FTA Decision No. 11 of 2023 for entities required to comply with it.

6. How Can Professional Corporate Tax Support Help?

Understanding UAE corporate tax exemptions requires more than checking whether an organisation falls into a particular category. Businesses must also consider ownership structures, registration requirements, application deadlines and supporting documentation.

Professional corporate tax support can help organisations:

• Review their eligibility for available exemptions.

• Understand the relevant FTA decisions and requirements.

• Assess corporate ownership and group structures.

• Prepare exemption applications and supporting records.

• Review corporate tax registration and compliance obligations.

• Identify potential tax risks before submitting applications.

Young & Right provides corporate tax advisory, assessment and compliance support to businesses operating in the UAE. Its team can help businesses understand their tax position and review applicable exemption opportunities.

You can explore its Corporate Tax Services in UAE for further information.

Conclusion

The 2026 update to UAE corporate tax exemptions introduces clearer application timelines, special transitional deadlines and additional clarity for certain subsidiaries and ownership structures.

Eligible organisations should review FTA Decision No. 15 of 2026, confirm their exemption category and prepare the required documentation within the applicable deadline. Getting professional advice can also help businesses avoid application errors and maintain compliance with UAE corporate tax requirements.