www.pwc.com Open in urlscan Pro
23.204.13.172  Public Scan

Form analysis
1 forms found in the DOM

GET https://www.pwc.com/m1/en/search-results.html

<form id="slimSearchForm" role="search" action="https://www.pwc.com/m1/en/search-results.html" method="get">
  <input id="slimSearch" class="slim-search" type="text" name="searchfield" placeholder="Search for industries, products, services and more">
  <input type="hidden" name="pwcSiteSection" autocomplete="off">
  <input type="hidden" name="pwcLang" value="en" autocomplete="off">
  <input type="hidden" name="pwcGeo" value="m1" autocomplete="off">
  <input type="submit" class="submit-search" value="">
</form>

Text Content

Skip to content Skip to footer
 * Index
 * Are you ready?
 * Learn more
 * Key initial insights and observations
 * Insights
 * Download: UAE Federal Corporate Tax Flyer


Transforming our Region Industries Services Insights & Media Careers About us

More


My Account Sign Out
Sign in Register

Middle East Region
Find a country or region
Global



Afrique
FrancophoneAlbaniaAmericaAndorraAngolaArgentinaArmeniaAustraliaAustriaAzerbaijanBahamasBahrainBarbadosBelgiumBermudaBoliviaBosnia
and HerzegovinaBotswanaBrasilBritish Virgin
IslandsBruneiBulgariaCambodiaCameroonCanadaCape VerdeCaribbeanCayman
IslandsCentral and Eastern EuropeChadChannel IslandsChileChinaColombiaCongo
(Brazzaville)Congo (Dem. Rep.)Costa RicaCroatiaCyprusCzech RepublicCôte
d'IvoireDenmarkDominican RepublicEcuadorEgyptEl SalvadorEquatorial
GuineaEstoniaFinlandFranceGabonGazaGeorgiaGermanyGhanaGibraltarGreeceGuatemalaGuineaHondurasHong
Kong SAR, ChinaHungaryIcelandIndiaIndonesiaInteraméricasIraqIreland (Republic
of)Isle of
ManIsraelItalyJamaicaJapanJordanKazakhstanKenyaKosovoKuwaitLaosLatviaLebanonLiberiaLibyaLiechtensteinLithuaniaLuxembourgMacedoniaMadagascarMalaysiaMaltaMauritiusMexicoMiddle
East
RegionMoldovaMongoliaMontenegroMozambiqueMéxicoNamibiaNetherlandsNetherlands
AntillesNew ZealandNicaraguaNigeriaNorwayOmanPakistanPanamaPapua New
GuineaParaguayPeruPhilippinesPolandPortugalQatarRomaniaRwandaSaudi
ArabiaSenegalSerbiaSingaporeSlovakiaSloveniaSouth AfricaSouth
KoreaSpainSwedenSwitzerlandTaiwanTanzaniaThailandTrinidad and
TobagoTurkeyTürkiyeU.S.UKUSUSAUgandaUkraineUnited Arab EmiratesUnited
KingdomUnited StatesUruguayUzbekistanVenezuela VietnamWest
BankZambiaZimbabweeSwatini/SwazilandУкраїнаישראל臺灣
Search

Show full breadcrumb
PwC Middle East Services Tax & Legal UAE Federal Corporate Tax

Menu

Transforming our Region
Transforming our Region
Transforming our Region Sustainability Technology Consulting Managed Services
Client stories Business model reinvention

Menu

Transforming our Region
Transforming our Region
Middle East Economy Watch Transforming our region: webcast series Middle East -
How to do Business Guides

Menu

Transforming our Region
Sustainability

Menu

Transforming our Region
Technology Consulting
GenAI Cloud Cybersecurity and Digital Trust Data and analytics Emerging
Technology Enterprise Solutions Artificial Intelligence Business applications
Metaverse Public Safety Technology Strategy Experience Consulting

Menu

Transforming our Region
Managed Services

Menu

Transforming our Region
Client stories

Menu

Transforming our Region
Business model reinvention

Featured

The New Equation

Tech powered

Menu

Industries
Industries
Consumer Markets Energy, Utilities & Resources Financial Services Government &
Public Services Industrial Manufacturing Transport & Logistics Health Industries
Real Estate Sovereign Investment Funds Tourism & Hospitality Entrepreneurial &
Private Business

Menu

Industries
Consumer Markets

Menu

Industries
Energy, Utilities & Resources

Menu

Industries
Financial Services

Menu

Industries
Government & Public Services

Menu

Industries
Industrial Manufacturing

Menu

Industries
Transport & Logistics

Menu

Industries
Health Industries

Menu

Industries
Real Estate

Menu

Industries
Sovereign Investment Funds

Menu

Industries
Tourism & Hospitality

Menu

Industries
Entrepreneurial & Private Business

Menu

Services
Services
Audit and Assurance Consulting Deals Tax & Legal Strategy& Startups & Scaleups
Transformation People & Organisation PwC's Academy

Menu

Services
Audit and Assurance

Menu

Services
Consulting

Menu

Services
Deals

Menu

Services
Tax & Legal

Menu

Services
Strategy&

Menu

Services
Startups & Scaleups

Menu

Services
Transformation

Menu

Services
People & Organisation

Menu

Services
PwC's Academy

Featured

27th CEO Survey

Perspectives in Risk

Menu

Insights & Media
Insights & Media
Publications Blogs & Articles Press releases Radio & TV interviews Videos Events

Menu

Insights & Media
Publications

Menu

Insights & Media
Blogs & Articles

Menu

Insights & Media
Press releases

Menu

Insights & Media
Radio & TV interviews

Menu

Insights & Media
Videos

Menu

Insights & Media
Events

Featured

27th CEO Survey

The New Equation

Menu

Careers
Careers
Life at PwC Experienced Graduate & Undergraduate UAE - Watani Programme Alumni

Menu

Careers
Life at PwC

Menu

Careers
Experienced

Menu

Careers
Graduate & Undergraduate

Menu

Careers
UAE - Watani Programme

Menu

Careers
Alumni

Menu

About us
About us
The New Equation We as strategic buyer and investor Our leadership team Code of
conduct Corporate Sustainability Net Zero with 2030 goals Transparency Reports
Analyst relations PwC office locations in the Middle East Alumni

Menu

About us
The New Equation

Menu

About us
We as strategic buyer and investor

Menu

About us
Our leadership team

Menu

About us
Code of conduct

Menu

About us
Corporate Sustainability

Menu

About us
Net Zero with 2030 goals

Menu

About us
Transparency Reports

Menu

About us
Analyst relations

Menu

About us
PwC office locations in the Middle East

Menu

About us
Alumni

Loading Results

No Match Found

View All Results


UAE FEDERAL CORPORATE TAX

Copy link Link copied to clipboard





Learn more: Read the key UAE Corporate Tax priorities before 1 January 2024


ARE YOU READY?

On 9 December 2022, the UAE released the Federal Decree-Law No. (47) of 2022 on
the Taxation of Corporations and Businesses (hereinafter referred to as the ‘CT
Law’). The CT Law will apply to Taxable Persons for financial years commencing
on or after 1 June 2023.

The CT law is materially aligned with the public consultation document that was
released by the Ministry of Finance (‘MoF’) on 28 April 2022 and expands on many
of the key provisions. As was promised, the UAE CT regime is predominantly based
on international best practice with a minimal compliance burden placed on
businesses relative to other regimes internationally. 

There are still certain aspects which are expected to be fully clarified in
subsequent Cabinet and Ministerial decisions, for example those related to
certain Exempt Persons and what will be regarded as Qualifying Income.

2:13


Video Player is loading.
Play Video
Play
Current Time 0:00
Loaded: 0.00%


0:00
Duration 2:13
Fullscreen
Mute


This is a modal window.



Beginning of dialog window. Escape will cancel and close the window.

TextColorWhiteBlackRedGreenBlueYellowMagentaCyanTransparencyOpaqueSemi-TransparentBackgroundColorBlackWhiteRedGreenBlueYellowMagentaCyanTransparencyOpaqueSemi-TransparentTransparentWindowColorBlackWhiteRedGreenBlueYellowMagentaCyanTransparencyTransparentSemi-TransparentOpaque
Font Size50%75%100%125%150%175%200%300%400%Text Edge
StyleNoneRaisedDepressedUniformDropshadowFont FamilyProportional
Sans-SerifMonospace Sans-SerifProportional SerifMonospace SerifCasualScriptSmall
Caps
Reset restore all settings to the default valuesDone
Close Modal Dialog

End of dialog window.

Playback of this video is not currently available



Introduction of UAE Federal Corporate Tax UAE CT will be applicable across all
Emirates and will apply to all business and commercial activities alike, except
for the extraction of natural resources, which will continue to be subject to
Emirate level taxation. Click here for more details. Frequently asked questions
To view a list of relevant FAQs, please refer to the Ministry of Finance website

How we can help you We can help you assess, analyse and implement the UAE
Federal Corporate Tax. Learn more here


KEY INITIAL INSIGHTS AND OBSERVATIONS



Taxable Persons and Tax Base

A Taxable Person as defined in the CT Law, is an individual and/or entity that
is subject to UAE CT. For the purposes of the CT Law, a distinction is made
between a Resident Person and a Non-Resident Person and the applicable Tax base
will depend on the nature of the Taxable person.
The following table sets out the aspects to consider when determining the nature
of a Taxable person (i.e. Resident vs. Non-resident) as well as the applicable
Tax base:


Resident Person Tax base An entity that is incorporated in the UAE (including a
Free Zone entity) Worldwide income A foreign entity that is effectively managed
and controlled in the UAE Worldwide income A natural Person / individual who
conducts a Business or Business Activity in the UAE Worldwide income
Non-resident Person Tax base Has a permanent establishment (‘PE’) in the UAE
Taxable income attributable to the PE Derives UAE Sourced Income The UAE sourced
income not attributable to the PE Has a Nexus in the UAE Taxable income
attributable to the Nexus

UAE sourced income

The CT Law introduced specific rules to determine when income will be regarded
as UAE sourced income. Generally speaking, income will be regarded as UAE
sourced income when the income is (1) derived from a UAE Resident Person (e.g.
the payor is a resident Person), (2) derived from a non-resident Person and is
attributable to a PE of that Person in the UAE of that non-resident Person (e.g.
the UAE PE is the payor), or (3) derived from activities performed, assets
located, capital invested, rights issued, or services performed or benefitted
from in the UAE.

Free Zone person

Companies and branches registered in a Free Zone are considered Taxable Persons
under the CT Law and are required to meet normal compliance obligations,
including transfer pricing requirements. However, provided a Free Zone entity
meets the conditions to be considered a Qualifying Free Zone Person (‘QFZP’), it
should be eligible for a 0% UAE CT rate on its Qualifying Income. The income of
a QFZP which is not Qualifying Income will be taxed at the standard 9% CT rate.


In order to qualify for the 0% CT rate, a QFZP must meet all of the following
conditions:

 * It must be a Free Zone Person (i.e. a juridical person incorporated,
   established or otherwise registered in a Free Zone, incl. branches);
 * Maintain adequate substance in the UAE;
 * Derive Qualifying Income (to be defined in a Cabinet Decision);
 * Not have made an election to be subject to the standard UAE CT regime;
 * Comply with all transfer pricing rules and documentation requirements; and
 * Meet any other conditions as prescribed by the MoF.


The CT law has not defined the meaning of ‘Qualifying Income’ and it is expected
to be clarified through Cabinet Decision.

Participation Exemption

Dividends and other profit distributions as well as foreign exchange, impairment
and capital gains and losses relating to ownership interests (referred to as a
‘Participating Interest’) in an entity (referred to as ‘Participation’) will be
exempt from tax if (1) the ownership interest is at least 5%; (2) a 12 month
uninterrupted holding period (or the intention to hold for 12 months) is in
place, and (3) the Participation is subject to tax in its country or territory
of residence at a rate that is not lower than 9%.

Tax losses

The CT Law provides that a Business can offset tax losses against the Taxable
Income of subsequent tax periods when computing the Taxable Income for that
period. The set-off during any tax period cannot exceed 75% of the Taxable
Income for the tax period (except in circumstances that may be prescribed in a
Cabinet Decision). Any tax loss remainder can be carried forward to a further
subsequent tax period.


A Taxable Person cannot claim tax loss relief for losses incurred before the
date of commencement of the UAE CT regime, losses incurred before it became a
Taxable Person under the CT Law and losses incurred from an asset or activity
the income of which is exempt, or otherwise not taken into account under the CT
Law.


UAE CT allows transfer of tax losses between group entities where there is 75%
or more common ownership and where other certain conditions are met such as
having the same financial year and using the same accounting standards.


However, the transfer of tax losses will not be allowed between group entities
that are either Exempt Persons or Qualifying Free Zone Persons.

Tax Group

UAE group entities may elect to form a Tax Group provided all the following
conditions are met:

 * The UAE parent entity holds directly or indirectly at least 95% of the (1)
   share capital; (2) voting rights; and (3) entitlement to profits and net
   assets;
 * All entities have the same financial year and prepares the financial
   statements using the same accounting standards; and
 * Neither the parent company or the subsidiary is an Exempt Person nor a
   Qualifying Free Zone Person (i.e. is subject to 0% UAE CT rate).


Despite the Exempt Person exclusion above, one or more subsidiaries in which a
Government Entity directly or indirectly holds at least 95% of the share of
capital, voting rights and entitlement to profits and net assets can form a Tax
Group, subject to certain conditions.


When a Tax Group is formed, the parent entity will be responsible for the
administration such as submission of one single tax return and settlement of the
tax liability for the Tax Group. The joint and several liability can be limited
to one or more members of the Tax Group, with an approval from the Authority.

Taxable Income

To reduce complexity and compliance costs, the UAE CT regime uses the accounting
net profit (or loss) as stated in the financial statements of a Business as the
starting point for determining its Taxable Income. For this purpose, the
financial statements should be prepared in accordance with accounting standards
accepted in the UAE. The UAE does not have specific Generally Accepted
Accounting Principles (GAAP) and International Financial Reporting Standards
(IFRS) are commonly used by businesses in the UAE.

In order to arrive at Taxable Income, expenditure incurred wholly and
exclusively for the purposes of the Taxable Person’s Business that is not
capital in nature may be deductible in the Tax Period in which it is incurred.
However, the CT Law disallows / restricts the deduction of certain expenses.

Taxation of Individuals

The UAE has not introduced personal income tax. In other words, UAE CT is not
applicable to individuals and their personal income (e.g., salary, dividends,
capital gains, income from investment in UAE property in their personal
capacity, etc.), with the exception of business income earned by individuals who
hold (or are required to have) a commercial license or permit.

Exempt Income

Recognising the UAE’s position as an international Business hub and leading
holding company location, the UAE CT regime exempts dividends and other profit
distributions received by a Taxable Person from a UAE tax resident entity (i.e.
local dividends).

CT registration / deregistration, Tax return and Payments

Every Taxable Person will be required to register electronically for UAE CT with
the Authority within a prescribed timeline and obtain a Tax Registration Number.
The registration would need to be undertaken even if the Taxable Person has
already been registered for Value Added Tax purposes.

In order to keep the administrative burden on taxpayers to a minimum, the CT Law
requires a Taxable Person to file only one tax return for each tax period.

Please see examples of filing, payment and Transfer pricing disclosure timelines
in the table below:


Fiscal Year End First Reporting Period Registration date Due Date of filing
first CT Return and payment Due Date for first TP disclosure form December 2022
January 2024 to December 2024 To be determined 30 September 2025 30 September
2025 June 2023 July 2023 to June 2024 To be determined 31 March 2025 31 March
2025


The filing will need to be done electronically no later than nine months from
the end of the relevant tax period. Any UAE CT payable will also need to be
settled within these timelines.

While further guidance on the form of the UAE CT return will be provided by the
Authority, the CT Law prescribes certain specific details, which inter alia
includes the tax period to which the UEA CT return relates, the accounting basis
used in the financial statements, the Taxable Income for the tax period, the
amount of tax loss relief claimed, the available tax credits claimed and the UAE
CT payable for the tax period.

Transfer Pricing

The CT Law introduces transfer pricing (‘TP’) rules and regulations. The
transfer pricing regulations take immediate effect coinciding with the effective
date of the other tax Provisions.

Both cross border and domestic transactions and arrangements between Related
Parties (including transactions undertaken by Free Zone entities) need to adhere
to the arm’s length standard i.e., transactions must be undertaken as if they
are carried out between independent parties under similar circumstances.

Furthermore, payments and benefits provided to Connected Persons should be at
Market Value, which should be determined by applying the arm’s length standard.





ARM’S LENGTH PRINCIPLE

In order to determine the arm’s length nature of the transactions between
Related Parties, the CT Law prescribes five methods which are broadly aligned
with the OECD TP Guidelines.

Additional guidance on the application of the arm’s length principle is expected
to be issued at a later date under a separate decision of the Authority (e.g.
measure of arm’s length range - interquartile vs full range, benchmarking
guidance, financial transactions, intra-group services, intangibles, etc.).



BEPS Pillar 2

As a member of the OECD Inclusive Framework on BEPS, the UAE should adopt and
implement Pillar Two (referred to as the “GloBE” rules).

The GloBE rules impose an additional ‘top-up’ tax on the profits earned in each
jurisdiction that large multinational groups operate in where the effective tax
rate in these jurisdictions is lower than 15%. The GloBE rules provide for two
mechanisms for the collection of the additional top-up tax, namely the Income
Inclusion Rule (‘IIR’), the Undertaxed Payments Rule (‘UTPR’).

The IIR imposes a top-up tax on an Ultimate Parent Entity in its jurisdiction of
tax residence with respect to a low-taxed foreign subsidiary, while the UTPR
imposes a top-up tax through a denial of deductions or other adjustment.

The CT Law does not currently make reference to Pillar Two or a potential higher
tax rate for large multinational groups. Until such time as the Pillar Two rules
are adopted by the UAE, UAE entities that are part of multinational group will
be subject to CT under the regular UAE CT regime.

OUR 2023 UAE CORPORATE TAX CLIENT EVENTS:

 * January 26 at the Address Boulevard: PwC UAE Corporate Tax Seminar - Dubai
   edition
 * January 30 at the Marriott Downtown: PwC UAE Corporate Tax Seminar - Abu
   Dhabi edition
 * January 31: Webinar with DIFC on UAE Corporate Tax
 * February 16: Dubai Chamber x PwC Middle East Event on UAE Corporate Tax

slide 3 of 6





LEARN MORE

34 results

20/08/24

UAE CT: “DETERMINATION OF TAXABLE INCOME” GUIDE

The Federal Tax Authority (FTA) has released a Corporate Tax (“CT”) Guide on
Determination of Taxable Income (“TI”). This Guide serves as a significant
resource, providing clarifications and additional insights on various important
topics calculation of the TI. Here is our overview of the guide followed by our
key takeaways.

10/06/24

UAE CORPORATE TAX - "FREE ZONE PERSONS" GUIDE

The Federal Tax Authority (FTA) has released a Corporate Tax (CT) Guide on Free
Zone (FZ) Persons, one of the most important and complex areas of the new
regime. This Guide serves as a significant resource, providing clarifications
and additional insights on various important topics in relation to FZ Persons.

15/05/24

“QUALIFYING GROUP RELIEF” GUIDE AND “BUSINESS RESTRUCTURING RELIEF” GUIDE

The Federal Tax Authority (FTA) has released a comprehensive Corporate Tax (CT)
Guide on Qualifying Group (QG) Relief. This guide serves as a significant
resource, providing clarifications and insights on many important topics in
relation to entities transactions covered within the scope of the relief,
conditions to be eligible for the relief, circumstances when the relief will be
clawed back and consequences, compliance requirements and interaction with other
parts of CT Law.

13/03/24

UAE CORPORATE TAX: DUBAI EMIRATE LAW NO. 1 OF 2024 - TAXATION OF FOREIGN BANKS

On March 7, Law No. (1) of 2024 (“Law”) on taxation of foreign banks operating
in Dubai was issued by the Ruler of Dubai, His Highness Sheikh Mohammed bin
Rashid Al Maktoum. This decision is effective from the date of its publication
in the official gazette which is March 8 and shall apply to tax periods
beginning after 8 March 2024. This new law annuls Regulation No.(2) of 1996 or
any other legislation that may contradict it. This Law specifies the principles
governing the calculation of taxable income, tax filing and payments, procedures
for the audit of tax filing, voluntary disclosure, and responsibilities and
procedures related to tax auditing.


Load more



DOWNLOAD UAE FEDERAL CORPORATE TAX FLYER




Follow us
Talk to our tax experts

Hide


CONTACT US

Charles Collett

Partner, UAE Corporate Tax, PwC Middle East

Tel: +971 54 793 4780

Email

David Van Der Berg

Director, UAE Corporate Tax, PwC Middle East

Tel: +971 50 703 5015

Email

Muzaffar Salaev

Director, UAE Corporate Tax, PwC Middle East

Tel: +971 562166904

Email

Christie Preston

Director, UAE Corporate Tax, PwC Middle East

Tel: +971 54 792 4593

Email


 * PwC Middle East
 * Services
 * Tax & Legal
 * UAE Federal Corporate Tax



Issues Navigating data privacy regulations New world. New skills. Responding to
the potential business impacts of COVID-19 Doing Business in the Middle East VAT
in the Middle East Megatrends Now: The need to ADAPT
Services Assurance and Audit Consulting Deals Entrepreneurial & Private Business
PwC's Academy Tax and Legal Strategy&
Industries
Banking and Capital Markets Consumer Markets Energy, Utilities & Resources
Financial Services Government/Public Services
Health Industries Industrial Manufacturing Real Estate Transportation and
Logistics
About us PwC office locations in the Middle East Our purpose and values
Corporate Sustainability Code of conduct Transparency reports Health, Safety and
Environment Policy Third party code of conduct PwC’s global human rights
statement Alumni
Publications
Careers Graduate & undergraduate careers Experienced careers Opportunities for
Omani nationals Opportunities for Saudi nationals PwC's Watani Graduate
Programme for UAE Nationals
Media centre Press releases Articles and blog posts TV and radio interviews

© 2017 - 2024 PwC. All rights reserved. PwC refers to the PwC network and/or one
or more of its member firms, each of which is a separate legal entity. Please
see www.pwc.com/structure for further details.

 * Privacy
 * Cookie policy
 * Legal
 * About site provider
 * Site map