UAE Corporate Tax Law: Defining Taxable Persons

Businesses preparing for the UAE corporate tax gained more clarity on the various tax provisions when the government released the Federal Decree-Law No. 47 of 2022 on the Taxation of Corporations and Businesses on 9th December 2022. The UAE corporate tax law serves as the legal basis for the Federal Corporate Tax that will be effective for financial years starting on or after June 1st 2023. The preparation for the new tax will not be complete without understanding what the law says about taxable persons.

Corporate tax consultants in Dubai can help you to understand how the corporate tax law defines a taxable person. Keep reading to know further:

Who Is a Taxable Person as per UAE Corporate Tax Law?

Article 11 of the UAE corporate tax law says that corporate tax will be imposed on taxable persons at the rates determined as per the Decree Law. It says that a taxable person can be a resident or non-resident person on whom the provisions of the UAE corporate tax Law are applicable and who is liable to pay Corporate Tax under the law.

Who is a Resident under the UAE Corporate Tax Law?

Clause 3 of Article 11 provides us with a definition of a Resident Person under the UAE corporate tax law. Corporate tax advisers in Dubai can guide you to determine whether you are a resident person under the corporate tax law. A Resident Person can be any of the following:

  1. A juridical person incorporated, established or recognised under relevant laws in the UAE, including a free zone person
  2. A juridical person incorporated, established or recognised under the relevant laws of a foreign jurisdiction that is effectively managed and controlled in the UAE
  3. An individual carrying out a Business or Business Activity in the UAE
  4. Any other person determined as a Resident Person in a Cabinet Decision issued by the UAE Minister of Finance

Who is a Non-resident Person under the UAE Corporate Tax Law?

Clause 4 of Article 11 of the UAE corporate tax law says a person who is not treated as a Resident Person under Clause 3 of this Article can be treated as a Non-Resident Person. Corporate tax consultants in Dubai can help you determine if you are Non-Resident Person as per the corporate tax law. The Non-Resident Person will also meet the following conditions:

  1. a) Has a Permanent Establishment in the UAE as under Article 14 of this Decree-Law
  2. b) Derives UAE-sourced income as under Article 13 of this Decree-Law
  3. c) Has a nexus in the UAE as specified in a decision issued by the Cabinet at the suggestion of the Minister of Finance

Corporate Tax Consultants in Dubai can help you Further

Businesses preparing for corporate tax in the UAE can use the insights provided in this blog for ensuring compliance. For further assistance, you can consult with the best corporate tax consultants in Dubai such as Jitendra Chartered Accountants (JCA). Our corporate tax consulting services in Dubai include CT Assessment & Advisory Services (one-time or retainer basis), CT Compliance Services & CT Agent Services to Represent to Federal Tax Authority (FTA) of UAE in case of any notices served by FTA. Ensure corporate tax compliance and avoid relevant penalties by availing of JCA’s corporate tax services in Dubai, UAE. Talk to our consultants for tax solutions that you can count on.