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Topic

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Presenter

Syed Imran Hasnain Jaffrey - SHAH JEE

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Contact of Presenter

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Corporate Tax - CT

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CT - Introduction

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CT - Introduction

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CT - Objectives

OBJECTIVES OF UAE CORPORATE TAX

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CT - Principles

PRINCIPLES OF UAE CORPORATE TAX

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CT - Application and
Impacts

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CT - Tax Period and Filing
of Return

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CT - Registration and
Deregistration

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CT - Registration and
Deregistration

TAX REGISTRATION
A procedure under which a Person registers for Corporate
Tax purposes with the Authority.

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CT - Registration and
Deregistration

TAX REGISTRATION NUMBER

A unique number issued by the Authority to each Person
who is registered for Corporate Tax purposes in the State.
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CT - Registration and
Deregistration

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CT - Registration and
Deregistration

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CT - Global Rates

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CT - UAE Rates

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CT - Taxable Income

TAXABLE INCOME - The income that is subject to

Corporate Tax under this Decree-Law.

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CT - Tax Payable

CORPORATE TAX PAYABLE

Corporate Tax that has or will become due for payment to
the Authority in respect of one or more Tax Periods.

Payment should be done within 9 months from the end of

the relevant Tax Period.
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CT - Calculation and
Return

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CT - Calculation and
Return

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CT – Foreign Tax Credit

▪ Corporate tax due can be reduced by the amount of

foreign tax credit for the relevant Tax Period.
▪ Foreign tax credit cannot exceed the amount of
corporate tax due on the relevant income.
▪ Unutilized foreign tax credit cannot be carried forward
or carried back.
▪ Taxable Person shall maintain all necessary records for
the purposes of claiming a foreign tax credit.
Description Home Country Host Country Host Country
Tax rate 9% 5% 15%
Taxable 1,000,000 1,000,000 1,000,000
income
Tax liability in 90,000 90,000 90,000
UAE
Tax liability in 90,000 50,000 150,000
respective (Foreign tax
countries credit)
Net tax 90,000 40,000 NIL
liability in UAE 23
CT - Withholding Tax

WITHHOLDING TAX CREDIT

The maximum withholding tax credit is the lower of:
▪ Amount of withholding tax.
▪ Corporate tax due.
WITHHOLDING TAX REFUND

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CT - Calculation and
Return

Information filed with the Authority for Corporate Tax

purposes in the form and manner as prescribed by the
Authority, including any schedule or attachment thereto,
and any amendment thereof.
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CT - Exempt Person

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CT - Exempt Person

▪ Federal and Local Governments,

▪ Ministries, government departments,
▪ Government agencies,
▪ Authorities and public institutions of the Federal
Government or Local Governments.

The Govt entity shall be exempt from Corporate Tax (CT),

unless it conducts a business or business activity under a
licence issued by a licensing Authority.

BUSINESS - Any activity conducted regularly, on an ongoing

and independent basis by any Person and in any location,
such as industrial, commercial, agricultural, vocational,
professional, service or excavation activities or any other
activity related to the use of tangible or intangible
properties.
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CT - Exempt Person

GOVERNMENT CONTROLLED ENTITY

Any juridical person, directly or indirectly wholly owned
and controlled by a Government Entity, as specified in a
decision issued by the Cabinet at the suggestion of the
Minister.

The Govt controlled entity shall be exempt from Corporate

Tax (CT), unless it conducts a business or business activity
that is not its mandated activity.

MANDATED ACTIVITY
Any activity conducted by a Government Controlled Entity
in accordance with the legal instrument establishing or
regulating the entity, that is specified in a decision issued
by the Cabinet at the suggestion of the Minister.

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CT - Exempt Person

NATURAL RESOURCES
Water, oil, gas, coal, naturally formed minerals, and other
non-renewable, non-living natural resources that may be
extracted from the State’s Territory.

STATE’s TERRITORY
The State’s lands, territorial sea and airspace above it.

BUSINESS ACTIVITY
Any transaction or activity, or series of transactions or
series of activities conducted by a person in the course of
its business.

The business or business activity of exploring, extracting,

removing, or otherwise producing and exploiting the
natural resources of the State or any interest therein as
determined by the minister. 29
CT - Exempt Person

The Business or Business Activity of separating, treating,

refining, processing, storing, transporting, marketing or
distributing the Natural Resources of the state.

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CT - Exempt Person

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CT - Exempt Person

Any entity whose principal activity is the issuing of

investment interests to raise funds or pool investor funds
or establish a joint investment fund with the aim of
enabling the holder of such an investment interest to
benefit from the profits or gains from the entity’s
acquisition, holding, management or disposal of
investments, subject to the fulfillment of the following
conditions:

▪ Investment funds or their managers are subject to

regulatory oversight by UAE competent authorities or
prescribed foreign competent authorities.
▪ Fund interests are traded on a Recognized Stock
Exchange, or the fund is widely marketed and available
to investors.
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CT - Exempt Person

▪ Investment funds are not intended to avoid corporate

taxes.
RECOGNIZED STOCK EXCHANGE - Any stock exchange
established in the State that is licensed and regulated by the
relevant competent authority, or any stock exchange
established outside the state of equal standing.

A pension or social security fund, either public or private, that

is subject to regulatory oversight by the competent authority
in the UAE shall be exempt, subject to fulfillment of the
requirements as prescribed by the Minister of Finance.

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CT - Taxable Person

A Person subject to Corporate Tax in the State

under this Decree-Law.

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CT - Natural and Juridical
Person

Any natural person or juridical person.

▪ Natural person
A natural person is a human beings which established sole
establishments and civil companies.
▪ Juridical person
A juridical person is an entity to which the law attributes
personality, such as public shareholding companies, limited
liability companies, and public joint stock companies etc.
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CT - Resident and Non-
resident Person

Resident Person
▪ Legal persons incorporated or established in the UAE,
including Free Zones.
▪ Natural persons who conduct a business or business
activity in the UAE.
▪ Foreign entities effectively managed and controlled in the
UAE.
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CT - Resident and Non-
resident Person

Non-resident Person

Foreign entities:
▪ Having a Permanent Establishment (PE) in the United
Arab Emirates.
▪ Earning State sourced income.
▪ Having a nexus in the UAE.

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CT - Residential Status

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CT - Residential Status

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CT - Taxable Person

Resident Person
Status Taxable Basis
A legal (juridical) person including Worldwide income.
a free zone person incorporated in
United Arab Emirates.
A foreign (juridical) person Worldwide income.
effectively managed and
controlled in United Arab
Emirates.
A natural person who conducts a Worldwide income
business and business activity in insofar for business.
United Arab Emirates. Business activity that
is conducted in UAE.
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CT - Taxable Person

Non-resident Person
Status Taxable Basis
A non-resident person Taxable income attributable of
having a permanent permanent establishment.
establishment in United
Arab Emirates.
A non-resident person United Arab Emirates sourced
derived state sourced income not attributable to
income. permanent establishment.
A non-resident person Taxable income attributable to
having a nexus in United the nexus.
Arab Emirates.
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CT - Taxable Person

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CT - Corporate Tax Base

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CT - State Sourced Income

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CT - State Sourced Income

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CT - State Sourced Income

Any amount accrued or paid for the use of money or credit,

including discounts, premiums and profit paid in respect of
an Islamic financial instrument and other payments
economically equivalent to interest, and any other
amounts incurred in connection with the raising of finance,
excluding payments of the principal amount.

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CT - State Sourced Income

A Person licensed in the State as an insurance provider that

accepts risks by entering into or carrying out contracts of
insurance, in both the life and non-life sectors, including
contracts of reinsurance and captive insurance, as defined
in the applicable legislation of the state.

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CT - Permanent Establishment

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CT - Permanent Establishment

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CT - Permanent Establishment

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CT - Investment Manager
Exemption

A Person who provides brokerage or investment management

services that is subject to the regulatory oversight of the
competent authority in the State.
The investment manager shall be considered an independent
agent when acting on behalf of a non-resident person if the
investment manager is:
a. Providing investment management or brokerage services
i.e. for commodities, real property, bonds, share,
derivatives, foreign currency or any other similar,
b. Subject to regulatory oversight,
c. Carrying out transactions in the ordinary course of
business,
d. Acting in an independent capacity,
e. Transacting on arm’ length basis and receiving
compensation for services, and
f. Not representing non-resident person related to any other
income in the UAE which is subject to Corporate Tax (CT). 51
CT - Partners in
Unincorporated Partnerships

A relationship established by contract between two Persons

or more, such as a partnership or trust or any other similar
association of persons, in accordance with the applicable
legislation of the state.

Foreign Partnership - A relationship established by contract

between two Persons or more, such as a partnership or
trust or any other similar association of Persons, in
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accordance with laws of a foreign jurisdiction.
CT - Family Foundation
and Foreign Partnership

Generally, the family foundation is a juridical person with a

separate legal personality, and prima facie is subject to
corporate tax. However, the family foundation can apply to
the Federal Tax Authority to be treated as an
unincorporated partnership if:
▪ It was established for the benefit of identifiable natural
persons; and
▪ The principal activity of the foundation is to manage
assets or funds associated with savings or investment;
and
▪ It was not formed for the avoidance of corporate tax.
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CT - Qualifying Free Zone

A designated and defined geographic area within the State

that is specified in a decision issued by the Cabinet at the
suggestion of the Minister.

A Qualifying Free Zone Person has right to elect to be

subject to Corporate Tax at the rates of 9%
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CT - Qualifying Free Zone

A juridical person incorporated, established or otherwise

registered in a Free Zone, including a branch of a Non-
Resident Person registered in a Free Zone.

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CT - Qualifying and Non-
Qualifying Income

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CT - Qualifying and Non-
Qualifying Income

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CT - Qualifying and Non-
Qualifying Income

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CT - Qualifying and Non-
Qualifying Income

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CT - Qualifying and Non-
Qualifying Income

Taxability of Qualifying Income

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CT - General Rules of
Determining Taxable Income

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CT - General Rules of
Determining Taxable Income

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CT - General Rules of
Determining Taxable Income

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CT - General Rules of
Determining Taxable Income

FOREIGN PE EXEMPTION
A resident person can make an election to not take into
account, the income, and associated expenditure, of its
foreign permanent establishments in determining its
taxable Income, and the taxable person can claim this
exemption if the tax on foreign income is at least 9%.
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CT - General Rules of
Determining Taxable Income

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CT - General Rules of
Determining Taxable Income

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CT - General Rules of
Determining Taxable Income

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CT - General Rules of
Determining Taxable Income

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CT - General Rules of
Determining Taxable Income

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CT - General Rules of
Determining Taxable Income

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CT - General Rules of
Determining Taxable Income

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CT - General Rules of
Determining Taxable Income

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CT - General Rules of
Determining Taxable Income

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CT - General Rules of
Determining Taxable Income

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CT - General Rules of
Determining Taxable Income

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CT - General Rules of
Determining Taxable Income

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CT - General Rules of
Determining Taxable Income

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CT - General Rules of
Determining Taxable Income

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CT - General Rules of
Determining Taxable Income

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CT - General Rules of
Determining Taxable Income

TRANSFER PRICING DOCUMENTATION

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CT - General Rules of
Determining Taxable Income

Any negative Taxable Income as calculated under this

Decree-Law for a given Tax Period.

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CT - General Rules of
Determining Taxable Income

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CT - Small Business Relief

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CT - Small Business Relief

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CT - Exempt Income

Any income exempt from Corporate Tax under this Decree-

Law.

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CT - Deductible
Expenditure

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CT - Non-deductible
Expenditure

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CT - Tax Group

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CT - Tax Group

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CT - Tax Group

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CT - Tax Group

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CT - Tax Group

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CT - Tax Group

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CT - Tax Group

TAXABLE INCOME OF A TAX GROUP

▪ Parent company shall consolidate the financial results,

assets, and liabilities of all member companies,
eliminating the inter group transactions.
▪ Unutilized Tax Losses of a new Subsidiary can be utilized
by the Tax Group to off-set the Taxable Income of the
Tax Group, relevant to that subsidiary.
▪ Unutilized taxable loss of the tax group cannot be used
to offset the taxable income of the new subsidiary.
▪ If a member company leaves the tax group with in 2
years of an asset/liability transfer, then such income
should be taken in account on the date when the
member company leaves the tax group.
▪ Any unutilized Tax Losses shall remain with the Parent
Company in case of cessation of the Tax Group.
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CT - General Anti Abuse
Rules

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CT - Financial Statements
and Record Keeping

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CT - Assessment and
Penalties

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CT - Conclusion

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CT - Conclusion

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Thank you
Questions and Answers

Closing Activities

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Disclaimer Statement
This power point presentation is prepared for general
understanding of UAE Corporate Tax issued by FTA in
United Arab Emirates (UAE). I used various sources to
collect information (including FAQ’s of FTA from:
www.tax.gove.ae) and applied my skills and expertise
on the subject in compiling this presentation.
Furthermore, this presentation is not made for any
publication as intellectual property, instead purely for
knowledge sharing purposes. Any words, sentences,
pictures, schedules, diagrams, or contents resembling
other publications can either be coincidental or used
solely for informative purposes as this presentation is an
exposition and not a research. If any one wants the
removal such content from this presentation, may write
to me via email on: [email protected]. I will see
the objections and try to respond at the earliest.
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