Resident and Non-Resident Persons for UAE Corporate Tax Purposes
The United Arab Emirates (UAE) has set up new corporate tax laws. These laws want to make businesses follow fair rules and help the UAE grow with strong investments. If you run a business in the UAE, you must know about resident and non-resident persons for corporate tax. Let’s break this down so you understand every part of it.
Who Is a Resident Person Under UAE Corporate Tax Law?
A resident person is:
- Any individual who runs a business in the UAE
- Any company or juridical person who is set up in the UAE, including Free Zone Persons
- A foreign company managed or controlled in the UAE
- Any other person named by the UAE Cabinet
A resident person must pay corporate tax on all their worldwide income. This means income earned inside or outside the UAE. If you are a person living in the UAE, you are called a resident if:
- You stay in the UAE for 183 days or more within any 12 months in a row.
- You are a UAE national, or you hold a valid UAE residence permit, and you:
- Have a home where you live in the UAE.
- Have a job or business in the UAE.
You can also read: Is a Natural Person Eligible for the Application of the Small Business Relief?
Who Is a Non-Resident Person Under UAE Corporate Tax Law?
A non-resident person is not a resident. They are:
- A company or juridical person not set up or managed in the UAE
- Any person who has a permanent establishment (PE) in the UAE
- Any person who earns state-sourced income from the UAE
- Any person who gets income from owning property in the UAE
Non-resident persons only pay tax on the part of their income linked to the UAE. The corporate tax rate is 9% on yearly taxable income over AED 375,000. These entities must register for corporate tax and file tax returns within 120 days after their fiscal year ends.
Note: If a non-resident person only receives state-sourced income and nothing else, they don’t have to register for UAE corporate tax.
Understanding Permanent Establishment (PE) in UAE
Permanent Establishment (PE) is a key idea in UAE tax law. It tells when a non-resident person must pay tax.
- Physical Presence:
If a company has an office, branch, or factory in the UAE, that is a PE. - Authority to Operate:
If someone in the UAE can do business for a foreign company, that company has a PE in the UAE. - Nexus with Property:
If a non-resident earns income from UAE property, that counts as a PE.
Steps to Comply with UAE Corporate Tax for Residents and Non-Residents
If you are a business or individual in the UAE, follow these steps:
- Register for UAE corporate tax with the Federal Tax Authority (FTA)
- Get your Tax Registration Number (TRN)
- File your tax return every year
- Pay any tax due by the deadline
- Keep records of your income and expenses
When Should You Register for UAE Corporate Tax?
- If you are a resident business, register as soon as you start business activity.
- If you are a non-resident with PE, register within 120 days after you become liable.
- If you only earn state-sourced income (and nothing else), you might not need to register.
Penalties for Not Registering or Paying UAE Corporate Tax
If you don’t register or pay your tax, you could:
- Face fines or penalties from the FTA
- Lose your business license
- Be stopped from doing business in the UAE
How Mubarak Al Ketbi (MAK) Auditing Can Help
Mubarak Al Ketbi (MAK) Auditing stands as your guide through the UAE corporate tax maze. Our experts will help you understand if you’re a resident or non-resident for tax. We’ll get you registered, help you file on time, and keep you safe from fines. If you want a reliable partner who knows the ropes, let us lead you through—the ball is in your court!
For more information, visit or contact us:
- Saraya Avenue Building – Office M-06, Block/A, Al Garhoud – Dubai – United Arab Emirates
- WhatsApp/call: +971 50 276 2132
