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Dividend Exemption

Definition

The Dividend Exemption under UAE Corporate Tax allows dividends received from qualifying shareholdings to be excluded from taxable income.


Key points


  • Applies to dividends from both UAE and foreign companies.
  • Shareholding must usually be at least 5%.
  • Prevents double taxation on distributed profits.


Practical example

A UAE holding company earns AED 1 million in dividends from its subsidiary in Europe. This income is exempt from UAE Corporate Tax.


Why it matters

Dividend exemptions encourage investment and strengthen UAE’s position as a holding company hub.

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