The Federal Tax Authority (FTA) has published the Tax Guide on Dividends and Participation Exemption Rules for Corporate Income Tax Purposes.
The Guide provides general guidance on the exemption of dividends and other profit distributions, as well as capital gains and certain income under the participation exemption rules, where a taxpayer holds a significant long-term interest in other legal entities. The Guide explains some of the terms and conditions in the Corporation Tax Law and covers the following:
- the definition of dividends and other profit distributions;
- the exemption of income and related expenses;
- the persons entitled to the exemption;
- the mechanisms of the participation exemption; and
- the effects of the exemption on tax groups.
The Guide was published in the Official Gazette in October 2023.