Non extractive natural resource exemption under UAE Corporate Tax

What is the non extractive natural resource exemption?

The non extractive natural resource exemption is a UAE Corporate Tax relief for businesses that process, transport, refine, store, or distribute the country's natural resources after they leave the ground. If you meet the conditions in Federal Decree-Law 47 of 2022, your qualifying income sits outside federal Corporate Tax and stays under Emirate-level taxation instead.

This relief sits next to the upstream Extractive Business Exemption UAE, but it covers the downstream side of the resource chain. It exists because Emirates already tax these activities directly under their own concession and licensing regimes. Forcing federal Corporate Tax on top would create double taxation. The full framework sits inside the UAE Corporate Tax law, and this article walks through the rules in plain English.

Who can claim the non extractive natural resource exemption?

The relief is narrow. It targets businesses that handle UAE natural resources after extraction, under a right, concession, or licence issued by a local government body. Federal Decree-Law 47 of 2022 sets four conditions you must meet at the same time.

The four core conditions

1. Your business must hold an interest, right, concession, or licence from a Local Government to undertake a non extractive natural resource business in the UAE.
2. Your income must come from activities that are part of, or directly related to, that non extractive business.
3. You must be effectively subject to tax under an Emirate-level Corporate Tax decree applicable to that business.
4. You must notify the Ministry of Finance (MoF) in the form and manner the Ministry prescribes.

If any one of these fails, the federal exemption falls away and your income returns to the standard 9% Corporate Tax regime above AED 375,000.

What counts as a Local Government

A Local Government is the government of an individual Emirate, including its departments, authorities, and other public institutions. A federal ministry licence on its own does not unlock this exemption. The right or concession must trace back to the Emirate-level authority that controls the natural resource activity in question.

What activities are covered?

Non extractive activities are the steps that turn raw extracted material into something usable or saleable. The law and Ministerial Decisions 243 and 244 of 2025 frame these as activities performed on natural resources after extraction. Think of the supply chain from the wellhead or mine onwards.

Typical in-scope activities

• Separating, treating, refining, processing, or storing natural resources.
• Transporting natural resources within the UAE through pipelines or other means.
• Marketing and distributing natural resources produced in the UAE.
• Related supporting services tied directly to those activities.

What is not covered

Extraction itself sits under the separate extractive exemption, not this one. Trading in imported resources, manufacturing finished consumer goods, and unrelated commercial activities do not qualify. If you run a downstream petrochemical plant turning gas into plastics for general sale, much of that revenue may fall outside the relief and back into standard Corporate Tax.

Extractive vs non extractive at a glance

How the exemption interacts with other income

The exemption applies only to qualifying non extractive income. If your company also earns income from activities outside the scope, that other income is taxed normally. The law requires you to treat the two streams as separate businesses for tax purposes.

Ancillary income rule

The law allows a small amount of other business income to ride along with the exempt activity if it is ancillary or incidental. If that ancillary income exceeds 5% of total revenue in a tax period, the relief on it can be lost. You must keep records that show the split clearly.

Separate accounting

You need to prepare standalone financial accounts for the non extractive business, allocate shared costs on a reasonable basis, and apply transfer pricing rules to any dealings with related parties. The Federal Tax Authority (FTA) can ask to see this allocation during review.

Tax rates and thresholds to keep in mind

Even though qualifying income is exempt at federal level, the wider Corporate Tax rules still matter for the rest of your group and for non qualifying income. The key numbers under Federal Decree-Law 47 of 2022 are:

• 0% Corporate Tax on taxable income up to AED 375,000.
• 9% Corporate Tax on taxable income above AED 375,000.
• 15% Domestic Minimum Top-up Tax (DMTT) for large multinationals with global revenue of EUR 750 million or more, from January 2025.
• Filing deadline: within 9 months of the end of your financial year.

If your group has a mix of activities, you may also want to review UAE Corporate Tax Exempt Entities to see how other exemptions sit alongside this one.

The notification step you cannot skip

Condition four often trips businesses up. The exemption is not automatic. You must notify the Ministry of Finance in the prescribed form and manner. Missing this step can put the entire relief at risk for the tax period in question.

What the notification typically includes

• Legal name, trade licence, and TRN (Tax Registration Number) of the entity.
• Details of the Local Government right, concession, or licence held.
• Description of the non extractive activities carried on.
• Confirmation that the entity is effectively subject to Emirate-level tax.
• The tax period from which the exemption is claimed.

Refer to the official guidance on the UAE Ministry of Finance website and the Federal Tax Authority portal for the current form and procedural rules.

Practical checklist before you claim

Use this short checklist with your finance team to test whether you can rely on the exemption for the current tax period.

1. Confirm you hold a current Local Government right, concession, or licence covering the non extractive activity.
2. Confirm the activity sits after the extraction stage on the resource value chain.
3. Identify the Emirate-level Corporate Tax decree you are subject to and confirm payments are made under it.
4. Map all revenue streams in the entity and tag each as qualifying, ancillary, or non qualifying.
5. Test that ancillary income stays at or below 5% of total revenue.
6. Maintain separate accounts for the non extractive business and allocate shared costs on a documented basis.
7. File the MoF notification for the relevant tax period.
8. Keep contracts, licences, and Emirate tax payment evidence ready for FTA review.

Worked example

Assume a UAE company holds an Emirate concession to transport and store crude oil through a pipeline network. It pays Emirate-level Corporate Tax on that pipeline business. In a financial year it earns:

• AED 480 million from pipeline transport and storage fees.
• AED 18 million from leasing spare warehouse capacity to an unrelated logistics firm.
• AED 4 million from selling scrap and surplus equipment.

The pipeline income qualifies for the non extractive natural resource exemption. The warehouse leasing income is unrelated and not ancillary because it is not a normal part of the pipeline business. It falls under standard Corporate Tax. The scrap income is incidental and likely ancillary, but the company must check that total ancillary income stays within the 5% limit. With separate accounts, MoF notification, and clean documentation, the federal Corporate Tax bill applies only to the non qualifying stream.

Other reliefs you may want to compare

Many UAE businesses qualify for more than one type of relief. Read these short guides next:

• UAE Small Business Relief for revenue up to AED 3 million through 2026.
• Public Benefit Entity Tax Exemption UAE for charitable and community bodies.
• Investment Fund Exemption UAE for qualifying funds and feeder structures.
• Pension Fund Exemption UAE for regulated retirement schemes.

For the full picture of Corporate Tax in the UAE, return to the hub on UAE Corporate Tax.

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