The proposed UAE corporate tax regime will follow the Permanent Establishment (PE) concept to determine the taxability of persons. PE is a critical international tax concept that refers to a fixed place of business in another country, triggering a tax liability in that country. The proposed UAE corporate tax regime will use this concept to tax foreign companies conducting trade or business in the UAE through a PE.
Businesses need to assess whether they have a PE in the UAE through relevant provisions before the corporate tax becomes effective on June 1st 2023. SPANCOM can help businesses to determine if they have a PE in the country. The UAE corporate tax regime proposes two tests to determine whether a company has a PE in the UAE: the Fixed Place Test and the Dependent Agent Test. In this article, we will discuss what those tests are.
However, businesses are advised to wait for the release of the UAE Corporate Tax Law to make any tax-related decision.
