UAE Ministry of Finance issued Ministerial Decision on Tax Treatment of business activities Conducted by Government Entity

The UAE Ministry of Finance has issued Ministerial Decision No. 68 of 2023 Treatment of all business and business activities Conducted by Government Entity as a Single Taxable Person.

This decision provides definitions and conditions for treating the Businesses and Business Activities conducted by the Federal Government Entities and Local Government Entities as a Single Taxable Person.

Let us understand Federal Government Entity, Representative Federal Government Entity and Representative Local Government Entity.

• The Federal Government Entity includes the Federal Government, ministries, government agencies, authorities, and public institutions of the Federal Government, while the Local Government Entity includes the Local Governments, ministries, government departments, government agencies, authorities, and public institutions of the Local Governments.
• The Representative Federal Government Entity and Representative Local Government Entity are the entities mandated to represent the Federal Government Entities and Local Government Entities that are treated as a Single Taxable Person, respectively.

Conditions to treat Government entities as a Single Taxable Person

• The Businesses and Business Activities conducted by the Federal Government Entities shall be treated as a single Taxable Person subject to certain conditions, such as including all businesses and activities conducted by the entities, conducting businesses and activities under a license issued by a Licensing Authority, and applying to the Authority to be treated as a single Taxable Person only by the Representative Federal Government Entity.
• Similar conditions apply to treating the Businesses and Business Activities conducted by the Local Government Entities as a single Taxable Person, with additional conditions such as conducting businesses and activities within the same Emirate and applying to the Authority to be treated as a single Taxable Person only by the Representative Local Government Entity.

Other conditions

• The Representative Federal Government Entity and Representative Local Government Entity shall notify the Authority within 20 days?of any changes to businesses and activities conducted by the entities and any circumstances that may affect the treatment as a single Taxable Person.
• The treatment as a single Taxable Person shall cease in certain circumstances, such as when the Authority approves an application made by the Representative Federal Government Entity or Representative Local Government Entity to cease the treatment, or when the entities fail to meet the conditions.

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By CA Vaishnavi Raghuwanshi