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.