We refine and distribute oil to other businesses — are we an 'extractive' business or not?

Many companies assume any activity connected to natural resources falls under one single exemption, but the Corporate Tax Law actually splits the two. Article 7 covers direct extraction, while Article 8 covers Non-Extractive Natural Resource Business — refining, processing and distribution, such as oil refining, petrochemicals, and cement manufacturing.

The Article 8 conditions differ slightly: the person must hold or have an interest in a right, license or concession issued by a local government, its income from that activity must come solely from persons carrying on a business or business activity (not from an ordinary end consumer), it must be effectively subject to tax at the Emirate level, and it must formally notify the Ministry. A minor side activity making up 5% or less of total revenue is disregarded and doesn't affect the exemption, but a larger mix of income requires proper accounting separation between the exempt and taxable portions.

At RASEEKH we review the full chain — the license source, the nature of the customers, and the size of any side activity — to determine precisely whether an operation meets the Article 8 conditions, and set up the required accounting separation before it becomes a point of dispute with the tax authority.