Taxable Person as per Corporate Tax Law in UAE

Family Foundations–(Conditions: Article 17)

Can make an application to the Authority to be treated as an Unincorporated Partnership
based on following conditions:

• It was established for the benefit of identified or identifiable natural persons, or for the benefit of a
  public benefit entity, or both.
• The principal activity is to receive, hold, invest, disburse, or otherwise manage assets or
  funds associated with savings or investment.
• The Family Foundation does not conduct any activity that would have constituted a Business
  or Business Activity which are subject to tax had the activity been undertaken, or its assets
  been held, directly by its founder, settlor, or any of its beneficiaries.
• The main or principal purpose of the Family Foundation is not the avoidance of Corporate Tax.

Unincorporated Partnerships–(Article 16)

Transfer of Tax Loss–(Article 38)

Tax loss can be offset against taxable income of another person if:

• Both Taxable Persons are juridical persons.

• Both Taxable Persons are Resident Persons.
• Either Taxable Person has a direct or indirect ownership interest of at least 75% in other from
  the start of the relevant tax period
• None of the Persons are an Exempt Person.
• None of the Persons are a Qualifying Free Zone Person.
• The Financial Year of each of the Taxable Persons ends on the same date.
• Both Taxable Persons prepare their financial statements using the same accounting
  standards.

Tax Return

• Taxable Person must file a Tax Return, to the no later than (9) nine months from the end of the relevant Tax Period

• The tax period is the financial year of the taxable person which is Gregorian calendar year, or the
  (12) twelve-month period for which the Taxable Person prepares financial statements.

To complete a tax return for CT folloing information will be included:

a) The Tax Period to which the Tax Return relates.
b) The name, address and Tax Registration Number of the Taxable
Person.
c) The date of submission of the Tax Return.
d) The accounting basis used in the financial statements.
e) The Taxable Income for the Tax Period.
f) The amount of Tax Loss relief claimed.
g) The amount of Tax Loss transferred
h) The available tax credits claimed
i) The Corporate Tax Payable for the Tax Period.

Tax Settlement–(Article 44)

The Corporate Tax due under this Decree-Law is settled in the following order:

• First, by using the Taxable Person’s available Withholding Tax Credit;
• Foreign Tax Credit
• Available Reliefs
  The remaining amount of the tax liability must be paid within 9 month from the end of the relevant
  tax period

Tax Refund–(Article 49)

A Taxable Person may make an application to the Authority for a Corporate Tax refund in accordance
with the provisions of the Tax Procedures Law in the following circumstances:

Categories of Taxable Persons Required to Prepare and Maintain Audited Financial Statements –MD-82 2023

For the purposes of Clause 2 of Article 54 of the Corporate Tax Law, the following categories of
Taxable Persons shall prepare and maintain audited financial statements:

1. A Taxable Person deriving Revenue exceeding AED 50,000,000 (fifty million United Arab
   Emirates dirhams) during the relevant Tax Period.
2. A Qualifying Free Zone Person.

Contact us at @ +971 45 570 204 / Email Us : [email protected], and one of our Corporate tax specialists will provide you with necessary support and consultation.

FAQ

Who is subject to Corporate Tax?

Broadly, Corporate Tax applies to the following “Taxable Persons”:

• UAE companies and other juridical persons that are incorporated or effectively managed and controlled in the UAE;
• Natural persons (individuals) who conduct a Business or Business Activity in the UAE as specified in a Cabinet Decision to be issued in due
  course; and
• Non-resident juridical persons (foreign legal entities) that have a Permanent Establishment in the UAE (which is explained under [Section 8]).
  Juridical persons established in a UAE Free Zone are also within the scope of Corporate Tax as “Taxable Persons” and will need to comply with the
  requirements set out in the Corporate Tax Law. However, a Free Zone Person that meets the conditions to be considered a Qualifying Free Zone
  Person can benefit from a Corporate Tax rate of 0% on their Qualifying Income (the conditions are included in [Section 14]).
  Non-resident persons that do not have a Permanent Establishment in the UAE or that earn UAE sourced income that is not related to their Permanent
  Establishment may be subject to Withholding Tax (at the rate of 0%). Withholding tax is a form of Corporate Tax collected at source by the payer on
  behalf of the recipient of the income. Withholding taxes exist in many tax systems and typically apply to the cross-border payment of dividends,
  interest, royalties and other types of income

Who should Register, file and pay Corporate Tax?

All Taxable Persons (including Free Zone Persons) will be required to register for Corporate Tax and obtain a Corporate Tax Registration Number. The
Federal Tax Authority may also request certain Exempt Persons to register for Corporate Tax.
Taxable Persons are required to file a Corporate Tax return for each Tax Period within 9 months from the end of the relevant period. The same
deadline would generally apply for the payment of any Corporate Tax due in respect of the Tax Period for which a return is filed.

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