CORPORATE TAX IN UAE - TAXABLE PERSON

 


Taxable person is a person who is subject to Corporate Tax under Federal Decree Law No. 47 of 2022 on Taxation of Corporations and Business. It is vital for all businesses to undergo an assessment to make sure whether the business is coming under the scope of Corporate Tax or not. In this section, we will have a detailed look at various taxable persons under this Decree Law.

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A Taxable person shall be either a Resident or a Non-Resident Person and this includes both incorporated entities and natural persons.

Following are the Resident Taxable Persons as per the Decree Law;

a) Juridical Person established/recognized in UAE

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A Juridical Person that is incorporated or otherwise established or recognised under the applicable legislation of the State, including a Free Zone Person. However, it does not include branch that are registered by a foreign juridical person in the state. The branch of a foreign juridical person shall be considered as Non-Resident and will be taxed on Permanent Establishment basis.

b) Foreign Juridical Persons effectively managed and controlled in UAE

A Juridical Person that is incorporated or otherwise established or recognised under the applicable legislation of a foreign jurisdiction that is effectively managed and controlled in the State. Effective management and control will be determined based on the place where key management and commercial decisions are made.

c) A natural person who conducts a Business or Business Activity in UAE

Any natural person who conducts a business activity which requires a license (including freelancing) is coming under the purview of this Decree law and are required to register for Corporate Tax.

d) An unincorporated Partnership that has elected to be a taxable person

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The partners in an Unincorporated Partnership can make an application to the Authority for the Unincorporated Partnership to be treated as a single Taxable Person. On approval one partner will be appointed as the person who is responsible for any obligations and proceedings in relation to this Decree-Law on behalf of the Unincorporated Partnership.

Normally an Unincorporated Partnership itself shall not be considered a taxable person as it has no legal personality. The partners conducting the business as an Unincorporated Partnership shall be treated as individual taxable persons. The income of such Unincorporated Partnership is taxable in the hands of the partners in their respective share of income.

e) Any other Person as may be determined in a decision issued by the Cabinet at the suggestion of the Minister.

**Please note that a branch of above-mentioned Persons in the UAE, shall be treated as one and the same Taxable Person.

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Location: Dubai - United Arab Emirates

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