The UAE Ministry of Finance has issued Cabinet Decision No. (1) of 2026 on Exempting Certain Sports Entities from Corporate Tax for the Purposes of Federal Decree-Law No. 47 of 2022 on the Taxation of Corporations and Businesses (the “Decision”). Issued on 12 January 2026 and formally announced on 9 February 2026, the Decision grants Corporate Tax-exempt status to qualifying international and regional sports organisations, reinforcing the UAE’s ambition to be a global hub for sports governance and development.

This article breaks down who qualifies, the conditions attached to the exemption, and what affected entities should do next.

Why This Matters

• The UAE has invested heavily in becoming a home for international sporting bodies and events, and this Decision gives such organisations formal tax clarity under the Corporate Tax regime. Rather than a blanket sector-wide carve-out, the exemption is narrowly targeted at genuine non-profit sports governance activity, with strict conditions to prevent it from being used as a general tax shelter.
• Notably, although issued in January 2026, the Decision applies retroactively from 1 June 2023 — the start date of the UAE Corporate Tax regime. This means entities that have already filed Corporate Tax returns for earlier periods may need to revisit their filing position.

Who Qualifies

Under Article 1 of the Decision, three categories of entity are defined:

International Sports Entity — a juridical person, association, federation, council, committee, or other organisation whose principal objective is the promotion, administration, or development of one or more sports at the international or regional level, acting as the international or regional governing or coordinating body for that sport, and recognised by the Ministry of Sports, the Competent Authority, the International Olympic Committee, the International Paralympic Committee, the Olympic Council of Asia, or a similar recognised body.

Sports Entity — a juridical person that is wholly owned and controlled, directly or indirectly, by an International Sports Entity, whose principal objective is the promotion, administration, or development of one or more sports, and which is recognised by or registered with the Ministry of Sports or the Competent Authority.

Ancillary Entity — a juridical person wholly owned and controlled, directly or indirectly, by an International Sports Entity, established solely to carry out activities (including administrative or operational activities) that are ancillary to those of the International Sports Entity or an affiliated Sports Entity.

Competent Authority refers to the relevant local body responsible for licensing, regulating, and supervising sports entities and activities under Federal Law No. 4 of 2023 Concerning Sports (e.g., the Ministry of Sports or a local sports council).

Conditions for the Exemption

Under Article 2(1) of the Decision, and for the purposes of Article 4(1)(i) of the Corporate Tax Law, a qualifying entity that is a Taxable Person is exempt from Corporate Tax only where all of the following conditions are met:

1. Activity restriction — the entity does not conduct a Business or Business Activity other than one that directly relates to fulfilling its principal or sole objectives.
2. Use of income and assets — its income or assets are used exclusively to further its principal or sole objectives, or to pay necessary and reasonable expenditure associated with those objectives.
3. Non-distribution requirement — no part of its income or assets may be paid to, or made available for, the personal benefit of any shareholder, member, trustee, founder, or settlor, except where the beneficiary is itself one of a defined list of qualifying entities — including Qualifying Public Benefit Entities, Government Entities, Government Controlled Entities, other International Sports Entities, Sports Entities, Ancillary Entities, or other sports-development entities meeting equivalent non-distribution conditions.
4. Any additional conditions the Minister may prescribe by way of further decision.

In short: the exemption is reserved for organizations that are genuinely non-commercial, sports-focused, and structurally prevented from channeling funds to private individuals.

Ongoing Compliance Obligations

The exemption is not a one-time determination — it must be maintained throughout each Tax Period:

• Exempt entities must provide the Federal Tax Authority (“FTA”), upon request and within the specified timeline, with all data, information, and documents necessary to verify that the entity meets the relevant definition and the conditions above.
• If an exempt entity fails to meet any condition, or ceases to meet the relevant definition, at any time during a Tax Period, it loses its Exempt Person status from the beginning of that Tax Period — subject to the limited relief provisions under Article 4(6) of the Corporate Tax Law (for example, where the failure is temporary and promptly rectified, or the entity is in the process of liquidation).
• To benefit from the exemption in practice, qualifying entities must register for Corporate Tax with the FTA and separately apply for exempt status, submitting supporting documentation to verify eligibility.

Practical Takeaways

Given the retrospective effect and the strict, ongoing nature of the conditions, entities that may fall within scope should:

• Map their structure against the definitions of International Sports Entity, Sports Entity, or Ancillary Entity, including ownership and control chains.
• Review all activities carried out to confirm they are strictly connected to the promotion, administration, or development of sport, and do not stray into unrelated commercial activity.
• Audit the use of income and assets to confirm no part is directed to the private benefit of shareholders, members, trustees, founders, or settlors outside the permitted categories.
• Revisit prior Corporate Tax filings for tax periods since 1 June 2023, given the retroactive application of the Decision, and consider whether any amendment or disclosure is needed.
• Prepare an application to the FTA, together with supporting documentation, to formally secure exempt status rather than assuming the exemption applies automatically.

Conclusion

Cabinet Decision No. 1 of 2026 gives the UAE’s sports sector welcome certainty on Corporate Tax treatment, while keeping the exemption tightly bound to genuine non-profit, sports-development activity. For international federations, regional sports bodies, and their UAE-based subsidiaries and support entities, the message is clear: the relief is real, but it comes with a compliance discipline that must be maintained on an ongoing basis, not just at the point of application.