Other BriefingsUAE Tax Authority Issues New Tax Rules For Non-Residents
The UAE Federal Tax Authority (FTA) has announced a new guide for the criteria for determining non-residents subject to corporate tax in the country. This clarification comes as part of the corporate tax law, which came into effect on June 1, 2023.
In a statement, the FTA invited all non-residents who derive income in the UAE to consult the new guidelines. We explain what they say.
For Non-Resident Individuals
According to the FTA’s guide, a non-resident may be subject to corporate tax under specific conditions. Two cases apply. The first is if an individual has a Permanent Establishment in the UAE and a Turnover exceeding AED1,000,000 (about US$272,300) during a calendar year. The second is if they derive State-Sourced Income from the UAE.
For Non-Resident Corporations
Non-resident corporations must meet specific criteria to be subject to Corporate Tax. These include having a Permanent Establishment in the UAE, deriving State-Sourced Income, or having a nexus in the UAE, such as earning rental income from property in the country.
The FTA also specifies the need for non-resident juridical persons to register for Corporate Tax purposes and obtain a Tax Registration Number (TRN) when they meet the relevant criteria. This is crucial to avoid compliance delays and possible administrative penalties.
Moreover, the FTA clarified that Corporate Tax registration is not required for Non-Resident juridical persons who solely derive State-Sourced Income and do not have a Permanent Establishment or nexus in the Emirates.
Additionally, the guide outlines that a Non-Resident natural person is required to register for Corporate Tax purposes and obtain a TRN if their Turnover attributable to their Permanent Establishment in the UAE exceeds AED1,000,000 within a calendar year.
For clarifications, please contact Dezan Shira & Associates Dubai office at dubai@dezshira.com and refer to our Business Guides below.
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