# UAE participation exemption checker

> Dividends and capital gains from a shareholding are exempt from UAE corporate tax if you hold at least 5% (or the stake cost AED 4 million or more) for at least 12 months, the subsidiary is subject to corporate tax of at least 9% where it is based, and no more than half of its assets are holdings that would not qualify themselves.

Interactive calculator: https://www.countify.ae/tools/participation-exemption-checker · Updated 2026-10-14 · Countify UAE

## Participation exemption outcomes

Held for over 12 months, subject to 9%+ tax, asset test met.

| Holding | Dividends and gains exempt |
| --- | --- |
| 3% costing AED 1m | No |
| 3% costing AED 5m | Yes |
| 20% costing AED 500,000 | Yes |

A small stake can still qualify if it cost AED 4 million or more.

## The conditions

All of these must be met for a Participating Interest:

- 5% or more ownership, or an acquisition cost of at least AED 4 million
- Held, or intended to be held, for an uninterrupted 12 months
- Subsidiary subject to corporate tax at 9% or more in its country (UAE subsidiaries pass)
- The asset test: no more than 50% of the subsidiary's assets are interests that would not qualify

## Dividends from UAE companies

Dividends from UAE resident companies are exempt anyway, whatever the shareholding. The participation exemption matters mainly for foreign subsidiaries and for capital gains on selling shares. See the [taxable income calculator](https://www.countify.ae/tools/taxable-income-calculator) for how exempt income is deducted.

## Legal basis

- Federal Decree-Law No. 47 of 2022, Article 23; Ministerial Decision No. 116 of 2023 (https://mof.gov.ae/corporate-tax/)

## Frequently asked questions

### Are dividends taxable in the UAE?

Dividends from UAE companies are exempt. Foreign dividends are exempt if the participation exemption conditions are met.

### Is there a minimum holding period?

Yes, 12 months, which can be met after the dividend if you intend to keep the stake that long.