UAE Corporate Tax
The UAE currently levies a 9% corporate tax. It was introduced in 2022 and implemented by 2023. Businesses were required to register for corporate tax and file their returns by the deadline.
This is how it works:
- Businesses pay 0% tax if their annual taxable income is under AED 375,000.
- Businesses pay 9% tax if their annual taxable income exceeds AED 375,000.
This is who has to register and file an annual corporate tax return in the UAE:
- Sole individuals with annual taxable income over AED 1 million
- Legal entities operating in the UAE
- Free zone businesses established in the UAE
Additionally, non-residents may be subject to a 5% VAT in the UAE.
Do Non-Residents Have to Pay Corporate Tax in the UAE?
Permanent Establishment
- If a non-resident has a “Permanent Establishment” (PE) in the country, they have to pay corporate tax. The tax is paid on the taxable income generated as a result of that PE.
- You obtain PE if you carry out your business activities through a physical office or factory. It also applies if you have a local agent carrying out the activities on your behalf.
- For example, if you’re a UK national who signs a two-year lease to open a branch of your existing business in the UAE. As this signals a fixed presence, you will be subject to CT.
Nexus
- If you’re a non-resident that owns property in the country and generates income from it, you have a “nexus” in the UAE.
- This mainly applies to entities. For example, if you own an offshore company that owns and operates a commercial property in the UAE, you will be required to register for CT.
| Feature | Permanent Establishment | Nexus |
| Meaning | Your business has a physical place (like an office or factory) or a dedicated dependent agent operating for a sustained period in the UAE to run your main business activities. | Earns income specifically from owning, leasing, or selling immovable property (real estate) in the UAE. |
| Identifier | Do you have an office/branch or someone permanently doing your core business in the UAE? | Do you earn money from a building or land you own in the UAE? |
| Applies to | Both non-resident entities and individuals | Mainly non-resident juridical persons (entities) |
State-Sourced Income
- State-Sourced Income, or SSI, is just money that comes from the UAE. This income is taxable even if the non-resident does not have PE in the country.
- However, if the non-resident’s only source of income is the SSI, they do not need to register for corporate tax.
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What are the Corporate Tax Deadlines for Non-Residents?
There are different deadlines to register and file corporate tax. Businesses are required to file their tax returns within nine months of the end of their financial period. The UAE corporate tax registration deadline for non-residents is a little more complicated, as it depends on the date you established your business in the country.
Category | Date of business establishment | Registration deadline |
Natural Person (individual) with a PE and turnover over AED 1M | Any time | 3 months from the date the individual meets the requirements of being a Taxable Person |
Juridical Person (entity) with a PE | On or after March 1, 2024 | 6 months from the date the PE was created/recognized |
Juridical Person (entity) with a nexus | On or after March 1, 2024 | 3 months from the date the Nexus was established |
How Can Non-Residents Register for Corporate Tax in the UAE?
If you are a non-resident person in the UAE who has to file a corporate tax return, this is how you can register for corporate tax. You can either do it yourself or work with a UAE tax expert to make it easier. Just remember that there is an AED 10,000 penalty for late registration.
1. Make Sure You Are Eligible to Register
- Ask yourself if you fulfill the eligibility requirements. This can be having a permanent establishment (PE), a nexus, or generating state-sourced income.
- If you are an entity (juridical person), it is mandatory to register for corporate tax.
- If you are an individual, you will only need to register if your annual taxable income generated from your PE exceeds AED 1 million.
2. Log in to the FTA Portal
- Residents and non-residents are required to register for corporate tax on the EmaraTax portal.
- You can either create an account or log into your existing profile.
3. Complete Your Application
- Select “Corporate Tax” and click “Register”.
- Enter your entity details and attach your trade license, identification documents, and owner details.
- Submit your application.
These are the main documents you’ll need to provide to register for corporate tax in the UAE as a non-resident:
- Trade license
- Memorandum of Association
- Certificate of Incorporation
- Tenancy contract
- Passport and Emirates ID of owners
Get Expert Tax Support From A&A Associate
A&A Associate houses seasoned tax consultants who can help non-residents understand and manage corporate tax in the UAE. We also offer VAT registration, compliance audits, and deregistration services for both mainland and free zone entities across the country.
