managed and controlled in the UAE will be treated as if they were UAE-incorporated entities. In short, the following types of companies will come within the scope of the UAE Corporate Tax regime:
• Domestic companies in the UAE Mainland
• Companies incorporated in the UAE free zones (Free Zone Persons)
• Foreign companies (provided they have a Permanent Establishment in the UAE; or earn income from a source in the UAE)
Classification of Residential Status of Legal Persons
Legal persons or companies will be classified as residents and non-residents. Consider the following:
1. UAE resident persons will be taxable in the UAE on their worldwide income
2. A legal person or a company incorporated in the UAE will be automatically considered a residents
3. Foreign companies will be treated as residents if they are effectively managed and controlled in the UAE. It means the directors or other decision makers of the company make the key management and commercial decisions in the UAE
4. Non-residents will be subject to UAE corporate tax on the taxable income from their Permanent Establishment in the UAE and income that is sourced in the UAE
Progressive UAE Corporate Tax Rate for Companies
As per the proposed UAE corporate tax regime, 0% corporate tax will apply on annual taxable income up to AED 375,000. And 9% corporate tax will apply on annual taxable income exceeding AED 375,000. Corporate tax advisors in Dubai can advise you on the relevant tax rates.
