UAE Ministry of Finance Introduces Corporate Taxation Guidelines for Non-resident Persons

The UAE Ministry of Finance has unveiled new guidelines for non-resident entities regarding corporate taxation. Cabinet Decision No. 56 of 2023 establishes a framework under the Federal Decree-Law No 47 of 2022 on the Taxation of Corporations and Businesses.

Under the guidelines, foreign companies and non-resident entities will be required to register for Corporate Tax purposes in the UAE. They will now be subject to UAE Corporate Tax on income derived from real estate and other immovable property located within the country.

Non-resident entities with UAE immovable property will be taxed on a net-income basis, allowing for the deduction of eligible expenses when calculating taxable income.

However, income from UAE immovable property owned by foreign or UAE resident individuals, either directly or through fiscally transparent vehicles, will generally not be subject to Corporate Tax unless it constitutes a licensed business activity. Additionally, Real Estate Investment Trusts and other Qualifying Investment Funds may be eligible for an exemption from Corporate Tax on income derived from investments in UAE immovable property, provided they meet the specified conditions.

The introduction of these guidelines aims to align the UAE's corporate taxation system with international standards, ensuring fairness and neutrality between domestic and foreign entities generating income from immovable property in the UAE.

You can access Law including Guidelines, Cabinet & FTA Decisions, Public Clarifications, Forms, Business Bulletins for all taxes (Vat, Excise, Customs, Corporate Tax, Transfer Pricing) for all GCC Countries in the LAW SECTION of GCC FinTax.