A foreign company will have a PE in the UAE if it has a fixed place in the UAE through which it carries out its business wholly or partly. As per the UAE corporate tax regime, a fixed place of business will include a place of management, a branch, an office (including a temporary field office or an employee’s home office), a factory, a workshop, real property, and a building site where activities are carried on for over six months. Pes can also include installations and structures used in the exploration of natural resources, mines, oil or gas wells, quarries and other places of extraction of natural resources.
A PE will not trigger if the activities conducted through a fixed place are preparatory or auxiliary in nature. Examples of preparatory and auxiliary activities include limited marketing and promotional activities, performing market research and attending seminars or conventions. A fixed place will not amount to a PE if it is used only to store, display or deliver the foreign company’s goods or keep a stock of goods with the sole purpose of making them available to another person for processing.
