UAE Nexus Rules for Non-Residents | Tax Guide

When Does a Non-Resident Have a UAE Tax Nexus?

In 2023, the UAE introduced new corporate tax rules. These changes made companies and business owners look closely at their tax duties. Mubarak Al Ketbi (MAK) Auditing helps businesses understand when the UAE will count a non-resident company as having a nexus, or strong connection, for corporate tax.

A non-resident juridical person means a business or company that’s registered or controlled outside the UAE. But, this company can still owe tax in the UAE under certain situations. The law now tells us when a non-resident company has to pay UAE corporate tax.

How Do You Define a Non-Resident Juridical Person?

A non-resident juridical person is any business formed or managed outside the UAE. If your company’s head office is not in the UAE and you don’t run your main operations here, the law calls you non-resident.

You’ll face UAE corporate tax if:

• You have a permanent establishment in the UAE.
• You get state-sourced income from within the UAE.
• You have a nexus in the UAE, as defined by the law.

What Creates a Nexus for Non-Resident Companies?

Your company can have a UAE nexus if you own or use any immovable property in the UAE. The law lists what counts:

• Land that lets you build, rent, or sell services, rights, or interests.
• Buildings or engineering works fixed to the ground or seabed.
• Fixtures or attachments that are a permanent part of land, a building, or a structure in the UAE.

If your company makes money from any sale, lease, assignment, or use of such property, the law says you have a UAE nexus. That means you must pay UAE corporate tax on that income.

Key Points Non-Resident Companies Should Know

To know if you need to register for tax, check these points:

• Permanent Establishment:
  If your company sets up a fixed business place in the UAE, even for a project, you may have a nexus.
• Property Use or Ownership:
  Any kind of building, land, or engineering work you own or use for business in the UAE can create a nexus.
• State-Sourced Income:
  If your company earns money from UAE customers, services, or property, you could have to pay tax.
• Special Projects:
  Projects for oil, gas, mining, construction, or technical work may create a tax nexus if carried out in the UAE.

Registration Steps for Non-Resident Companies

When the law says you have a UAE nexus, you must:

• Register your company with the Federal Tax Authority (FTA).
• Get a Tax Registration Number (TRN) for your business.
• File your corporate tax return each year and keep records of your UAE income.
• Pay any tax owed on time to avoid penalties.

If you don’t register or pay, you can face fines and legal action from the UAE government.

How Mubarak Al Ketbi (MAK) Auditing Helps With UAE Nexus

When you work with UAE tax law, it can feel like you’re threading a needle in a haystack! Mubarak Al Ketbi (MAK) Auditing helps you stay on the straight and narrow.

We can help you by:

• Explaining when your company has a UAE nexus for tax.
• Registering your business and getting a TRN from the FTA.
• Reviewing your company’s projects, property, and contracts for tax duties.
• Keeping your tax filings and records correct and up to date.
• Protecting your business from fines, errors, or missed deadlines.

For more information:

• Visit our office: Saraya Avenue Building – Office M-06, Block/A, Al Garhoud – Dubai – United Arab Emirates
• Or contact/WhatsApp: +971 50 276 2132