The UAE Ministry of Finance has announced Ministerial Decision No. 302 of 2024 on 10 December 2024, which replaces Decision No. 116 of 2023, revising the regulations concerning the participation exemption as outlined in the Corporate Tax Law.
The update introduces new definitions, including “Qualifying Foreign Permanent Establishment,” “Non-Qualifying Foreign Permanent Establishment,” and “Parent Company.” It addresses ownership interest, aggregation of ownership interests, transfer of ownership interests, debt instruments issued by the participation, subject to tax, conditions for holding companies, minimum acquisition cost, application of the asset test, assets of the participation, expenditure in relation to the acquisition and disposable of a participating interest, income from ownership interests in a participation, liquidation proceeds and losses, foreign permanent establishment exemption, and repeals.
The Decision is effective from 1 January 2025.
