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Welcome to our website blog. We provide valuable insights into tax advisory services related to corporate tax regulations in the United Arab Emirates (UAE) for foreign entities. Understanding tax obligations and exemptions is crucial for businesses in the UAE or those considering establishing a presence in this dynamic country. In this article, we discuss the key aspects of UAE corporate tax and its implications for foreign entities.
Scope of UAE Corporate Tax in Tax Advisory
Foreign entities that operate in the UAE through a permanent establishment or are considered residents must pay UAE corporate tax. However, simply earning UAE-sourced income doesn’t trigger the obligation to pay corporate tax or require the foreign entity to register and file for UAE corporate tax. Therefore, a foreign entity must meet specific criteria for taxation.
Tax Advisory for Non-Residents and Foreign Juridical Persons
Non-residents must pay UAE corporate tax if they have a permanent establishment in the UAE or earn income sourced from the UAE, which may be subject to 0% taxation. For instance, income comes from a UAE resident, a UAE Permanent Establishment, or activities performed, assets located, capital invested, and rights used in the UAE. Thus, understanding these criteria is essential for determining tax obligations.
Tax Advisory for Foreign Individuals and Tax Residency
A foreign juridical person can qualify as a UAE resident for corporate tax purposes. It will face UAE corporate tax on income sourced both locally and internationally if managed and controlled in the UAE.
Understanding Permanent Establishment in Tax Advisory
A foreign person establishes a Permanent Establishment in the UAE if:
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They have a fixed business location in the UAE for operations, or
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A representative conducts business on their behalf in the UAE.
Tax Advisory: Implications for Foreign Individuals Owning Property
Foreign individuals who personally own UAE property usually avoid corporate tax and compliance obligations. Therefore, such ownership doesn’t directly lead to tax liabilities.
Tax Advisory for Foreign Juridical Persons Investing in Real Estate
Investments in UAE real estate by foreign juridical persons can lead to a taxable permanent establishment. This applies if the real estate functions as a fixed place of business where operations occur.
UAE Sourced Income and Withholding Tax: Tax Advisory
Income is considered sourced from the UAE when:
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It originates from a UAE resident.
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It is attributed to a non-UAE resident’s Permanent Establishment in the UAE.
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It stems from activities performed, assets located, capital invested, or services utilized in the UAE.
The Corporate Tax Law outlines a list of taxable income under these criteria.
Tax Advisory for Foreign Entities in the UAE: Conclusion
Foreign entities must understand their UAE tax obligations to operate efficiently. Whether evaluating a permanent establishment’s impact or addressing real estate tax issues, tax advisory services ensure businesses stay compliant with UAE tax laws.
Registered Tax Agency and Agents
Tax Agency Registration Name: PARKER RUSSELL OBAID AUDITING
Tax Agency Registration Number: 30000269
Tax Agent Registration Name: Mansour Abdulwahab Mohamed Ahmed
Tax Agent Registration Number: 20037867
To speak with our corporate tax expert kindly email us at: infodubai@pr-uae.com or sales@pr-uae.com