Private pension and social security funds

The same Exempt Person status may be available to certain private pension funds or social security funds that meet the relevant conditions following an application to and approval by the FTA to be exempt from Corporate Tax.99

To be eligible for exemption from Corporate Tax, these private pension funds and social security funds need to be subject to regulatory oversight of a competent authority in the UAE, and must have a pool of assets that have been designated as “pension plan assets” or “fund assets” by law or a contract governing the establishment and operation of the funds.100

These assets must be solely used to finance the pension plan benefits or end of service benefit.101

Additionally, the plan members/beneficiaries must have a right or a contractual claim or entitlement to the assets or earnings of the fund.102

The fund must have an Auditor, which is required to confirm annually that the requirements for the fund to be exempt have been complied with.103

Income received by the fund can only come from:104

• investments or deposits held solely for the benefit of the fund and the investments do not constitute a Business operated by the fund;
• underwriting commissions charged for the fund;
• rebates given to fund managers that are not considered payment for their services; or
• any other income earned through investments for the benefit of plan members or beneficiaries.

For further details on how private pension funds or social security funds may be exempt from Corporate Tax, readers are advised to consult Ministerial Decision No. 115 of 2023 on Private Pension Funds and Private Social Security Funds.

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