30 August 2026 · Conditions
The Subject-to-Tax & Holding-Period Tests
Beyond the 5%/AED 4m ownership, two conditions decide the participation exemption: the interest must be held continuously for at least 12 months (or held with the intention to), and the participation must be subject to tax at a rate of at least 9% in its home jurisdiction. There is also an asset-composition test that, after MD 302 of 2024, applies mainly to related-party participations.
Exiloz Management & Tax Consultant · Dubai-based FTA-focused advisory · VAT, corporate tax & accounting
The 12-month holding
Duration protects the relief.
- Hold continuously for at least 12 months.
- Or hold with the intention to.
- Short-term flips will not qualify.
- Track acquisition and disposal dates.
The 9% and asset tests
Substance in the participation matters.
- Participation subject to at least 9% tax at home.
- Certain regimes are treated as meeting this.
- Asset-composition test applies to related parties.
- Documentation supports the position.
Frequently Asked Questions
For confirming the conditions are met.
How long must I hold the participation?
At least 12 months continuously, or with the intention to hold for 12 months.
What is the 9% subject-to-tax test?
The participation must be subject to tax at a rate of at least 9% in its home jurisdiction to qualify.
Does the asset test always apply?
After MD 302 of 2024, the asset-composition test applies mainly to related-party participations.
Can Exiloz verify the conditions?
Yes. We test the holding, subject-to-tax and asset conditions with evidence.
Do you meet the conditions?
Exiloz confirms the 12-month, 9% and asset conditions for your participation.