In January 2026, the UAE Ministry of Finance issued Cabinet Decision No. 1 of 2026, granting a Corporate Tax (CT) exemption to certain sports entities that support the development, promotion and governance of sports at international and regional levels. This decision supports the UAE’s vision of becoming a global sports hub and encourages international sporting bodies to establish and expand their presence in the UAE.

This legislation will take effect from 1 June 2023. Given its retrospective application, we expect additional guidance outlining the next steps for businesses that meet the conditions and have already filed their FY24 UAE CT returns.

Who Is Eligible?

The exemption applies to the following entities, if they meet the required conditions:

• International Sports Entities: Organisations whose primary purpose is to promote, administer or develop sports at the international or regional level and that are officially recognised by relevant national and international sports authorities (i.e., the Ministry of Sports, the International Olympic Committee, the International Paralympic Committee, or any relevant Competent Authority, etc.).
• Sports Entity: An entity wholly owned and controlled (directly or indirectly) by an International Sports Entity, established to promote, administer or manage sports activities, and is recognised by national authorities (i.e., the Ministry of Sports or any relevant Competent Authority).
• Ancillary Entity: An entity wholly owned and controlled (directly or indirectly) by an International Sports Entity, established solely to carry out activities that are ancillary to those carried out by an International Sports Entity or a Sports Entity (i.e., administrative or operational activities).

Key Conditions for Corporate Tax Exemption

To qualify, the entity must:

• Only conduct activities that directly relate to the principal or sole business objectives.
• Ensure all its income, expenses and assets are used exclusively to support the principal or sole business objectives.
• Ensure that no part of its income or assets is paid to, or otherwise, made available for, the private or personal benefit of any shareholder, member, trustee, founder or settlor except for certain entities which include, but are not limited to, Qualifying Public Benefit Entities, Government Entities, Government Controlled Entities and any other entity as specified in this Cabinet Decision.
• Any additional conditions as specified by the Minister.

Compliance and Monitoring

• An exempt entity must be able to provide the Federal Tax Authority (FTA) with any information or documentation it requests to verify that it meets the criteria for exemption.
• If the conditions are not met, the tax exemption will be lost from the start of that tax period. However, the exemption will not be lost if the entity is being wound up or dissolved, or if the failure to meet the conditions is only temporary and will be rectified promptly, if there are appropriate procedures in place to ensure the conditions will continue to be met. An exception may also apply in any other circumstances prescribed by the Minister.

What Does This Mean for You?

Businesses should carefully review whether they meet the criteria to qualify as an exempt person under this new legislation. Although an exemption may be available, eligible entities must first register for CT with the FTA and then submit an application to request an exemption from the CT regime.

Please contact a member of our CT team if you have any questions or would like to discuss how this may affect you.