2. Are all foreign companies operating in the UAE subject to Corporate Tax?
Foreign companies are subject to Corporate Tax only on income earned from their permanent establishments in the UAE or from sources within the UAE.
3. How is taxable income calculated for foreign companies and PEs?
Taxable income is determined based on income earned within the UAE, adjusted for allowable deductions and exemptions, as per UAE Corporate Tax regulations.
4. Are foreign companies required to register for Corporate Tax in the UAE?
Yes, foreign companies with a permanent establishment or earning UAE-sourced income must register with the Federal Tax Authority (FTA) and file Corporate Tax returns.
5. Are there exemptions for foreign companies under the UAE Corporate Tax regime?
Exemptions may apply to foreign companies earning income from international air and sea transport, provided reciprocity is granted in their home jurisdiction.
6. What is the tax treatment for income earned outside the UAE by foreign companies?
Only income earned within the UAE or attributable to a UAE permanent establishment is subject to UAE Corporate Tax. Income earned outside the UAE is not taxed.
7. Can foreign companies claim deductions for expenses incurred in the UAE?
Yes, foreign companies can claim deductions for expenses that are wholly and exclusively incurred for the purpose of generating taxable income in the UAE.
8. How are profits repatriated by foreign companies taxed in the UAE?
The UAE does not impose withholding taxes on repatriated profits or dividends paid to foreign entities.
9. What transfer pricing rules apply to foreign companies in the UAE?
Foreign companies must comply with the UAE’s transfer pricing rules, which require transactions between related parties to be conducted at arm’s length and supported by appropriate documentation.
10. Are there specific filing requirements for foreign companies?
Foreign companies must file an annual Corporate Tax return and maintain proper financial records for their UAE operations. Additional reporting requirements may apply for multinational enterprises.
11. How does the UAE Corporate Tax interact with international tax treaties?
The UAE’s extensive network of double tax treaties may reduce or eliminate tax liability for foreign companies, depending on the specific treaty provisions.
12. What penalties apply for non-compliance by foreign companies and PEs?
Penalties may be imposed for late registration, failure to file tax returns, underreporting income, or non-payment of tax due.
13. Are foreign companies required to prepare audited financial statements for their UAE operations?
Yes, foreign companies must prepare financial statements for their UAE operations in accordance with applicable accounting standards, which may be subject to audit requirements.
14. Can foreign companies offset losses against future taxable income in the UAE?
Yes, losses incurred by a UAE permanent establishment can generally be carried forward to offset future taxable income, subject to certain conditions.
15. How does Corporate Tax apply to cross-border services provided by foreign companies?
Income from services provided by foreign companies to UAE-based clients is subject to Corporate Tax if the income is attributable to a UAE permanent establishment or sourced within the UAE.
Abhijith brings over four years of experience from a chartered accountancy firm, where he built a strong foundation in statutory compliance, audits, accounting, finance, and taxation. His academic background in finance seamlessly complements his professional journey.
Ajay is an experienced accounting professional known for his precision and client-focused approach. He brings deep expertise in bookkeeping, financial reporting, and business advisory services, ensuring clients meet their financial goals.