The Ministry of Finance announced on 09 February 2026 the issuance of Cabinet Decision No. (1) of 2026 which had been formally issued on 12 January 2026, granting a Corporate Tax exemption to certain qualifying sports entities under Federal Decree-Law No. 47 of 2022 on the Taxation of Corporations and Businesses.
The Decision provides that, for the purposes of Article 4(1)(i) of the Corporate Tax Law, certain entities may qualify as exempt persons, namely:
- International Sports Entities
- Sports Entities wholly owned and fully controlled (directly or indirectly) by an International Sports Entity
- Supporting Entities wholly owned and fully controlled (directly or indirectly) by an International Sports Entity and established exclusively to carry out supporting activities
Importantly, the exemption is not framed as a general “non-commercial” exemption. Rather, eligibility is conditional upon strict operational and distribution restrictions set out in Article 2 of the Decision.
These include that the entity:
- Must not conduct business activities except those directly related to achieving its principal or exclusive objectives;
- Must use its income and assets exclusively to serve those objectives or to settle necessary and reasonable related expenses;
- Must not distribute income or assets for private benefit, except to specifically listed qualifying entities; and
- Must comply with any additional conditions determined by the Minister of Finance.
Entities are also required, upon request, to submit documentation to the Federal Tax Authority demonstrating satisfaction of both the definitional and substantive conditions.
Further, where an exempt entity ceases to meet the conditions during a Tax Period, it will lose its exempt status from the beginning of that Tax Period subject to Article 4(6) of the Corporate Tax Law
Notably, although issued on 12 January 2026, the Decision applies retroactively from 1 June 2023 aligning with the commencement of the Corporate Tax regime
Strategic Signals for the Corporate Tax Framework
- Policy-Aligned, Targeted Relief
The Decision confirms that Corporate Tax exemptions remain carefully structured and aligned with national priorities. Relief is tied to regulatory oversight under Federal Law No 4/2023 on Sports and not granted on the basis of sector alone. - Substance and Control Oversight
Eligibility is dependent on:
- Formal recognition by the Ministry of Sports or a Competent Authority;
- Wholly owned and fully controlled structures (for Sports and Supporting Entities); and
- Strict non-distribution and purpose-limited income use requirements.
This reinforces the UAE’s emphasis on operational substance and controlled exemption categories rather than broad sectoral carve-outs.
- Structured Approval and Compliance Discipline
Exempt entities must apply and substantiate eligibility throughout the Tax Period. The formalised approval process underscores the Federal Tax Authority’s increasingly documentation-driven and compliance-focused enforcement posture.
Broader Implications for Businesses
The Decision highlights the UAE’s measured evolution of Corporate Tax: competitive in rate, yet increasingly structured in governance. Businesses across sectors should interpret this as part of a wider move toward rules-based administration, controlled exemptions, and enhanced regulatory scrutiny.
Our team regularly advises businesses and sector-specific entities on Corporate Tax eligibility, exemption structuring, and compliance under Federal Decree-Law No. 47 of 2022. For further information, please contact Suneer Kumar at suneer@alsuwaidi.ae, Vida Grace Serrano at vida@alsuwaidi.ae, or Mamdouh Tawfik at m.tawfik@alsuwaidi.ae.