UAE Exempts Non-Commercial Sports Entities from Corporate Tax Under New Law

The United Arab Emirates has introduced a significant Corporate Tax exemption for non-commercial sports entities, reinforcing its commitment to developing a sustainable and globally competitive sports ecosystem. This exemption has been introduced under Cabinet Decision No. (1) of 2026, issued pursuant to Federal Decree-Law No. 47 of 2022 on the Taxation of Corporations and Businesses.

Legal Basis of the Corporate Tax Exemption

The exemption is granted in accordance with the UAE Corporate Tax framework and applies to specific sports-related entities that operate on a non-commercial basis. The decision aligns with international tax best practices and supports the UAE’s vision of becoming a global sports hub.

Who Qualifies for the Corporate Tax Exemption?

The Corporate Tax exemption applies to the following categories of entities:

• International sports entities
• Local sports entities
• Ancillary or supporting entities established exclusively to support sports activities

To qualify, these entities must focus primarily on the promotion, organisation, management, or development of sports at a regional or international level.

Mandatory Conditions to Avail the Exemption

To prevent misuse of the exemption, the law imposes strict conditions, including:

• The entity must operate strictly on a non-commercial basis
• It must be officially recognised by the Ministry of Sports or another competent UAE authority
• All income and assets must be used solely for achieving sports-related objectives
• No income or assets may be distributed to founders, shareholders, members, or trustees
• Unrelated commercial activities are not permitted

An exception applies where income or assets are transferred to government entities, public benefit entities, or other approved sports entities.

Application and Approval Process

Eligible entities are required to submit an application to the Federal Tax Authority (FTA), along with supporting documentation. The FTA will assess compliance with all legal and regulatory requirements before granting the exemption.

Why This Corporate Tax Exemption Matters

This exemption is a strategic move by the UAE Government to:

• Encourage sustainable growth of the sports sector
• Support non-profit and developmental sports organisations
• Enhance the UAE’s global competitiveness in sports
• Ensure alignment with international tax frameworks

Key Takeaway

The introduction of this exemption provides much-needed clarity and relief to non-commercial sports entities operating in the UAE. However, entities must carefully assess their activities and compliance status before applying, as any deviation from the prescribed conditions may result in the loss of Corporate Tax exemption.