On 17 April 2024, the UAE Federal Tax Authority (FTA) released the Corporate Tax Guide on Business Restructuring Relief – CTGBRR1. The relief permits certain restructuring transactions to occur in a tax-neutral manner without activating corporate tax liabilities.
This guide is designed to provide general guidance on the Business Restructuring Relief available under Article 27 of the UAE Corporate Tax Law. The guide provides the readers with an overview of the following with respect to Business Restructuring Relief:
- transactions covered within the scope of the relief,
- conditions to be eligible for the relief,
- consequences of electing for the relief,
- circumstances when the relief will be clawed back and the consequences of clawback of the relief,
- compliance requirements, and
- interaction with other provisions of the UAE Corporate Tax Law.
How to use this guide
The relevant articles of the Corporate Tax Law and the implementing decisions are indicated in each section of the guide. It is recommended that the guide is read in its entirety to provide a complete understanding of the definitions and interactions of the different rules. Further guidance on some of the areas covered in this guide can be found in other topic-specific guides.
In some instances, simple examples are used to illustrate how key elements of the Corporate Tax Law apply to Business Restructuring Relief. The examples in the guide:
- show how these elements operate in isolation and do not show all the possible interactions with other provisions of the Corporate Tax Law that may occur. They do not, and are not intended to, cover the full facts of the hypothetical scenarios used nor all aspects of the Corporate Tax regime, and should not be relied upon for legal or tax advice purposes, and
- are only meant for providing the readers with general information on the subject matter of this guide. They are exclusively intended to explain the rules related to the subject matter of this guide and do not relate at all to the tax or legal position of any specific juridical or natural persons.
Who should read this guide?
The guide should be read by any Taxable Person intending to transfer its entire Business or part of an independent Business to another Taxable Person or who will become a Taxable Person as a result of the transfer. It is intended to be read in conjunction with the Corporate Tax Law, the implementing decisions, and other relevant guidance published by the FTA.
