Applicability of Corporate Tax in the UAE

Corporate Tax –

The form of tax levied on the net income of the business and other corporations. It will be imposed on the rates decided which are 0% or 9% or 15%

Who are Taxable People for CT –

• Both residents and Non-Residents are taxable
• Residents are –
1. A company established under UAE law (mainland, free zone and offshore).
2. An individual conducting SME business or related activities in the UAE
3. Companies that are formed outside UAE, but effectively managed and controlled from UAE.
4. Any Individual determined by the authority.
• Non Residents are –
1. An organization that has a permanent establishment in the UAE
2. A company which is receiving income from a source in the UAE
3. Any nexus with UAE.
• A branch of a company in the UAE can also be considered as a resident as per CT.

State-sourced Income–

The income generated in a state in the UAE is termed as state-sourced income. The following will give you a gist of what can be considered a state-sourced income.

• Resident’s turnover generated in the UAE.
• Non-Resident`s income generated through PE in UAE.
• Income which is accrued or received through activities performed, capital invested, rights issued or services performed in the UAE
• Wholly or partially performed contracts in the UAE and the income generated from the same.
• Income generated from movable or immovable property in the UAE.
• Income generated from the sale of goods In the UAE
• Income generated from the services provided or utilized in UAE.
• Income from intellectual or intangible property.
• Income from Insurance or reinsurance when –
1. The asset insured is located in UAE.
2. The insured activity is conducted in UAE.
3. The insured person is a resident.
• The interest income when –
1. A borrower is a resident person.
2. The borrower is a government entity.
3. The loan is against immovable property in UAE.