UAE Corporate Tax Laws: 151 FAQs Explained

151 FAQs on UAE’s new legislation for Corporate Tax (CT) laws

The United Arab Emirates (UAE) has introduced new Corporate Tax (CT) laws through Federal Decree Laws No. 47 of 2002. This comprehensive guide provides answers to 151 frequently asked questions (FAQs) about the UAE’s CT laws, offering a detailed understanding of its regulations, exemptions, definitions, rates, and more.

The FAQs cover a range of topics, starting with an introduction to UAE’s CT laws, its role in the Middle East, and its position with international enforcement agencies. The guide delves into the regulations applicable to both Onshore and Free Trade Zone (FTZ) entities. It provides insights into the definitions of various terms used within the CT laws, including entities, taxable incomes, exempt persons, business activities, and more. The guide further explores exemptions, reliefs, deductions, and computations of taxable incomes, ensuring a comprehensive understanding of the CT framework.

(A) UAE’s Introduction for CT laws

Briefs on UAE’s CT laws

(i) Tax consultants + Chartered Accountants (both) dealing with corporate enterprises in UAE facing challenges against new Taxation of Corporation and Business Houses (TCBH) which applicable from June 01, 2023.

(ii) Special features for TCBH in UAE

(a) Imposition of Corporate Tax (CT)

(b) Applicable rates for CT

(c) Eligible exempted persons for CT

(d) Eligible taxable persons (like taxpayer in India) for CT

(e) Applicable CT base

(f) Eligible Free Zone Person (FZP) for CT

(g) Eligible calculations of taxable incomes for CT

(h) Eligible calculations of exempted incomes for CT

(i) Eligible reliefs for CT

(j) Eligible deductions for CT

(k) Applicable calculations for CT

(l) Procedure for payments + refunds (both) of CT

(m) Procedure for filing of tax returns for CT

(n) Provisions for violations + penalties (both) for CT

2. Briefs on UAE’s location in Middle East

(i) UAE commonly known Emirates + also geographically its part of West Asia continental (Middle East).

(ii) UAE located at eastern end of Arabian Peninsula + sharing its border with Persian Gulf in north + Oman in east + also Saudi Arabia in southwest (all).

(iii) UAE constituted federation of 7 Emirates like

(a) Abu Dhabi

(b) Ajman

(c) Dubai

(d) Sharjah

(e) Umm Al Quwain

(f) Ras Al Khaimah (RAK)

(g) Fujairah

• Federation of 7 Emirates formally established on December 02, 1971 with Abu Dhabi being capital of UAE.

(iv) UAE having Arabic as official language with English which widely spoken + used in business + also United Arab Emirates dirham (AED) used as currency (all).

(v) (a) UAE’s oil reserves 6^th largest in world

+ (plus)

(b) UAE’s natural gas reserves 7^th largest in world.

(vi) UAE having modern infrastructure like roads + accommodations + stable political systems + most liberal trade mechanism comparative to other part of Middle East region (Gulf) all.

(vii) UAE not 100% depend on energy sector like oils + natural gases (only).

(ix) UAE having significant contribution towards Gross Domestic Product (GDP) from non energy sector’s activities (operations).

(x) (a) UAE becomes regional + international centre for TV + media (all).

(b) Dubai’s media city + twofour54 + Abu Dhabi’s media zone (all) already attracting key international players in world.

(xi) UAE’s service sector + public administration + defense + tourism + construction already played important role in GDP from late 1990s (all)

(xii) UAE specifically attempting to attract tourists + foreign businesses (both).

(xiii) UAE already developed its tourism sector + business sector (both)

(xiv) UAE’s govt. already encouraged major infrastructure projects like:-

(a) Construction of accommodations

(b) Construction of transportation systems

(c) Construction of hotels

(d) Construction of resorts

(e) Construction of restaurants

(f) Construction of expansion of airports

(xv) UAE being international business hub + global financial centre already become global destination for businesses + also investments (all).

3. Briefs on UAE’s role for International Enforcement Agencies (IEA)

(i) UAE already member of Organization for Economic Cooperation and Development (OECD)

(ii) UAE already issued Economic Substance Regulations vide Resolution No. 31 of 2019 by minister on April 30, 2019 based on assessment of UAE’s tax framework through European Union Code of Conduct Group on Business Taxation.

(iii) UAE already issued guidance for application of Regulations on September 11, 2019 vide Minister’s Decision No. 215 of 2019 + Decision No. 58 of 2019 for determination of regulatory competencies against regulatory authorities task with administration + also enforcement of Regulations (both).

(iv) UAE further amended regulations on August 10, 2020 vide Resolution No. 57 of 2020 + also updated guidance’s on August 19, 2020 vide Minister’s Decision No. 100 of 2020 (both).

4. Briefs on UAE’s regulations for Onshore + Free Trade Zone (FTZ) (both)

• UAE needed to prepare appropriate regulations for onshore + FTZ companies + other business modes (all) to carry defined relevant activities to maintain + also to demonstrate adequate economic presence to qualify for Economic Substance Test (EST) in UAE.

(B) UAE’s legislations for Direct Tax + Indirect Tax (both)

5. Briefs on UAE’s Direct tax + Indirect tax (both)

(i) Government of UAE (Govt.) not permitted to levy personal Income tax like salary + rent + etc. (all) in UAE beside CT imposed commencing from financial year June 01, 2023.

(ii) (a) CT used to levy on oil company’s incomes @55%

+ (plus)

(ii) Also CT used to levy on foreign bank’s incomes @20% at Emirate level.

(iii) UAE govt.’s major source of revenue was from non-tax incomes like sale of petroleum product + custom duties + etc. (all)

(iv) UAE’s govt. levied indirect tax in 2017 based on consumptions like excise tax on carbonated beverages + energy drinks + tobacco products (all)

(v) UAE’s govt. levied Value Added Tax (VAT) in 2018 on most of goods + services (both) except specifically exempted through co-ordination with other Gulf countries.

6. Briefs on UAE’s CT laws

(i) Ministry of Finance (MoF) announced introduction of Federal CT laws on January 31, 2022 + applicable for financial year commencing from June 01, 2023 based on transformation + demand for global minimum tax from OECD + other countries + to adhere international standards + to achieve its strategic objectives + also to accelerate UAE’s developments (all).

+ (plus)

(ii) (a) UAE issued Federal Decree-Law No. 47 of 2022 on Dec 09, 2022 for Income tax on business incomes commonly known Corporate Tax (CT) laws (all).

+ (plus)

(b) CT Laws providing legislative basis for introduction + implementation of Federal Corporate Tax

+ (plus)

(c) UAE’s CT Laws applicable for financial year commencing from June 01, 2023.

(d) UAE’s CT be paid in addition to VAT + Excise Tax + also etc. (all) except specifically exempted under CT Laws.

(iii) UAE’s CT Laws already prepared based on best global practices + incorporated 100% principles which internationally used + also accepted (all).

(iv) UAE already signed more than 130 treaties including under negotiations with several countries + also jurisdictions (both)

(v) UAE’s CT Laws applicable on 100% forms of businesses based on net incomes of taxable persons like companies + non companies (both) as direct tax on incomes derived (earned) except specifically exempted in UAE.

(vi) UAE’s CT Laws to include Transfer Pricing (TP) regulations + documentations (both).

(vii) Federal Tax Authority (FTA) in UAE is similar to Central Board of Direct Taxes (CBDT) in India which responsible for administrations + collections + enforcements of UAE’s CT Laws + other federal taxes + to issue guidance’s + to provide responses against clarifications + also to provide awareness in public (all).

(viii) UAE’s CT Laws permitted to delegate powers for implementation against open ended provisions to Cabinet based on suggestions of Minister like to specify for qualifying incomes + exemption’s categories + conditions for exemptions + deductible expenditures + transitional provisions + also etc. (all).

(ix) UAE’s many CT Laws provisions yet to be applicable from future’s date after conclusion of decision by Cabinet on suggestion of Minister on time to time.

(x) UAE’s MoF be treated competent authority for bilateral tax agreements + multilateral tax agreements + also for International Exchange of Information’s (IEI) (all).

(xi) UAE’s MoF permitted to issue further guidance’s + to implement regulations of UAE’s CT Laws + also for other federal taxes (all).

(xii) UAE’s CT treated direct tax to be imposed on 100% incomes of juridical persons + also on 100% business incomes (only) of non juridical

7. Briefs on UAE’s CT rates on business incomes under Chapter II of Article 2 + 3

• CT Law under Federal Decree-Law No. 47 of 2022 providing certain statutory tax rates to be levied in UAE like:

(i) Rate of tax on taxable persons for taxable period in UAE

(a) @ 0% when taxable business incomes of taxable persons for tax period not exceeding AED 3.75 lac (approximately USD 1.02 lac)

+ (plus)

(b) Also @ 0% when Qualifying Incomes of QFZP without any monetary ceiling (limit) like AED 3.75 lac

+ (plus)

(c) @ 9% when taxable business incomes of taxable persons for tax period exceeding AED 3.75 lac (approximately USD 1.02 lac)

+ (plus)

(d) Also @ 9% when Non-Qualifying Incomes of QFZP for tax period for tax period exceeding AED 3.75 lac (approximately USD 1.02 lac)

(ii) Ceiling of AED 3.75 Lac decided in decision by minister on January 31, 2022

(iii) Qualifying Incomes yet to be clarified in decision by minister.

(iv) CT Law not providing guidance’s for application of Pillar 2 in UAE.

(v) (a) CT Law includes reliefs for small businesses where small business permitted to opt for not having derived taxable incomes for tax period in UAE.

+ (plus)

(b) Also CT Law not providing ceiling + other legal requirements (both) to opt for not having derived taxable incomes for tax period in UAE.

8. Briefs on UAE’s Exempt Persons (EP) under Chapter III of Article 4 to 10

(i) Certain persons exempted from CT payable under Federal Decree-Law No. 47 of 2022 like:

(a) 100% govt.’s entities

(b) 100% ’s controlled entities

(c) 100% persons engaged in Extractive Business (EB)

(d) 100% persons engaged in Non-Extractive Natural Resource Business (NENRB)

(e) 100% Qualifying Public Benefit Entities (QPBE) like charitable trust in India

(f) 100% Qualifying Investment funds (QIF)

(g) 100% Public Pension (PP) + Public Social Security Fund (PSSF) + Private Pension (PP) + Private Social Security Fund (PSSF).

(h) 100% juridical persons incorporated in UAE + wholly (100%) owned + also controlled by Exempt Persons (EP) those conducting certain activities like :

(ha) Undertaking wholly (100%) + partly (not 100%) activities of EP.

(hb) Engaging 100% for holding assets + investing funds for benefit of EP.

(hc) Carrying ancillary activities for main activities being carried by EP.

(i) Any other person may be determined in decision issued by Cabinet on suggestion of Minister.

9. Briefs on UAE’s Taxable Persons (TP) under Chapter IV of Article 11

(i) CT be imposed on taxable persons at rates determined under Federal Decree-Law No. 47 of 2022.

(ii) Taxable persons may be resident persons + also not resident persons of UAE (both).

(iii) Branch of persons referred under Article 11(3) be treated 1 and same taxable persons in UAE.

(iv) Cabinet on suggestion of Minister + also in coordination with relevant competent authorities permitted to issue decision for specifying any category of business + business activities conducted by resident persons + also non-resident persons of UAE.

10. Briefs on UAE’s Corporate Tax Base (CTB) under Chapter IV of Article 12

• CTB be based on residency of juridical person + natural person + non-resident persons (all) under Federal Decree-Law No. 47 of 2022 like:

(i) CT on resident juridical person in UAE

(ii) CT on resident natural person in UAE

(iii) CT on non-resident person in UAE

11. Briefs on UAE’s Reliefs under Chapter VIII of Article 26 + Article 27

(i) Transfer in Qualifying Groups (Article 26)

• Members of same qualifying groups permitted for not taking capital gains or capital losses for computing taxable incomes against transfer of 1 or more than 1 assets or liabilities between 2 members of same qualifying group.

(ii) Business Restructuring Reliefs (BRR) (Article 27)

• Taxable persons permitted for not taking capital gains + capital losses (both) against business restructuring for computing taxable incomes after satisfying certain conditions.

12. Briefs on UAE’s Deductions Chapter IX of Article 28 to Article 33

(i) UAE’s Deductible Expenditures (DE) (Article 28)

(ii) UAE’s Interest Expenditures (IE) (Article 29)

(iii) UAE’s General Interest Deduction (Article 30)

(iv) UAE’s Specific Interest Deduction (Article 31)

(v)UAE’s Entertainment Expenditures (EE)( (Article 32)

(vi) UAE’s Non Deductible Expenditures (NDE) (Article 33)

13. Briefs on UAE’s Simplification for Filling of Tax Return by Taxable Persons

S.No	For financial year ending on	For 1st reporting period	Registration date	Due Date for filing 1st CT Return + CT payment	Due Date for 1st TP disclosure
(i)	Dec, 2023	From Jan 2024 to Dec 2024	To be determined	Sep 30, 2025	Sep 30, 2025
(ii)	Jun, 2023	From July 2023 to June 2024	To be determined	Mar 31, 2025	Mar 31, 2025

14. Briefs on UAE’s Tax base for Resident Persons

S.No	Resident Persons	Tax base
(i)	100% entities incorporated in UAE + Free Zone Entities (FZE) (both)	100% Global Incomes
(ii)	100% foreign entities effectively managed + also controlled from UAE (both) similar to POEM in India	100% Global Incomes
(iii)	Natural Person (individual) conducting business + business activities (both) in UAE	100% Global Incomes

15. Briefs on UAE’s Tax base for Non Resident Persons

S.No	Non-Resident Persons (NRP)	Tax base
(i)	When NRP’s PE located in UAE	100% taxable incomes which attributable to PE located in UAE
(ii)	When NRP deriving UAE’s Sourced Incomes	100% UAE’s sourced incomes
(iii)	When NRP having Nexus in UAE	100% taxable incomes attributable to Nexus located in UAE

(C) UAE’s legislations for CT (Direct tax) on business’s incomes

Briefs on UAE’s Federal Decree-Law No. 47 of 2022 for CT on business’s incomes

• Federal Decree-Law No. 47 of 2022 on Taxation of Corporations + Businesses issued by his Highness Sheikh Mohamed bin Zayed Al Nahyan, President of UAE + also issued more Decree-Law like :-

(i) For reviewing constitution of UAE

(ii) For Federal Decree-Law 1 of 1972 on competencies of Ministries + powers of Ministers + also its amendments (all).

(iii) For Federal Decree-Law 26 of 1981 on Commercial Maritime Law (CML) + also its amendments (both).

(iv) For Federal Decree-Law 5 of 1985 on promulgating Civil Transactions Law (CTL) + also its amendments (both).

(v) For Federal Decree-Law 18 of 1993 on promulgating Commercial Transactions Law (CTL) + also its amendments (both).

(vi) For Federal Decree-Law 4 of 2000 on Emirates Securities + Commodities Authority and Market + also its amendments (all).

(vii) For Federal Decree-Law 8 of 2004 on Financial Free Zones (FFZ)

(viii) For Federal Decree-Law 6 of 2007 on regulation of Insurance Operations + also its amendments (both).

(ix) For Federal Decree-Law 2 of 2008 on National Societies and Associations of Public Welfare (NSAPW) + also its amendments (both).

(x) For Federal Decree-Law 8 of 2011 on reorganization of State Audit Institution

(xi) For Federal Decree-Law 4 of 2012 on Regulation of Competition

(xii) For Federal Decree-Law 2 of 2014 on Small and Medium Enterprises (SME)

(xiii) For Federal Decree-Law 12 of 2014 on organization of Auditing Profession + also its amendments (both).

(xiv) For Federal Decree-Law 9 of 2016 on Bankruptcy + also its amendments (both).

(xv) For Federal Decree-Law 13 of 2016 on establishment of FTA + also its amendments (both)

(xvi) For Federal Decree-Law 7 of 2017 on Excise Tax + also its amendments (both)

(xvii) For Federal Decree-Law 7 of 2017 on Tax Procedures + also its amendments (both)

(xviii) For Federal Decree-Law 8 of 2017 on VAT + also its amendments (both)

(xix) For Federal Decree-Law 14 of 2018 on Central Bank + organization of Financial Institutions and Activities (FIA) + also its amendments (all)

(xx) For Federal Decree-Law 15 of 2018 on Collection of Public Revenue + also Public Funds (both)

(xxi) For Federal Decree-Law 26 of 2019 on Public Finance

(xxii) For Federal Decree-Law 19 of 2020 on Trust

(xxiii) For Federal Decree-Law 31 of 2021 on promulgating Crimes and Penalties Laws + also its amendments (both)

(xxiv) For Federal Decree-Law 32 of 2021 on Commercial Companies

(xxv) For Federal Decree-Law 37 of 2021 on Commercial Registry

(xxvi) For Federal Decree-Law 46 of 2021 on Electronic Transactions + also Trust Services (both)

(xxvii) For Federal Decree-Law 35 of 2022 on promulgating Law of Evidence in Civil + also Commercial Transactions (both)

(D) UAE’s Definitions for different words used under CT Laws (Chapter-I)

17. Meaning of UAE’s State (Article I(i))

• State to include United Arab Emirates (UAE)

18. Meaning of UAE’s Federal Govt. (Article I(ii))

• Federal Govt. to include Govt. of UAE

19. Meaning of UAE’s Local Government (govt.) (Article I(iii))

• Local Govt. to include any of govt. of member of Emirates of Federation

20. Meaning of UAE’s Ministry (Article I(iv))

• Ministry to include MoF

21. Meaning of UAE’s Minister (Article I(v))

• Minister to include Minister of Finance (MoF)

22. Meaning of UAE’s Authority (Article I(vi))

• Authority to include FTA

23. Meaning of UAE’s Authority (Article I(vii))

• Authority to include FTA

24. Meaning of UAE’s Corporate Tax (CT) (Article I(viii))

• Corporate Tax to include tax imposed through Federal Decree-Law No. 47 of 2022 on juridical persons + also business income (both)

25. Meaning of UAE’s Business (Article I(ix))

• Business to include any activity being conducted regularly + on ongoing + independent basis by any person + at any location like industrial + commercial + agricultural + vocational + professional + service + excavation activities + other activity related to use of tangible properties + also intangible properties (all).

26. Meaning of UAE’s Qualifying Incomes (QI) (Article I(x))

• Qualifying Income to include any income derived by Qualifying Free Zone Persons (QFZP) where CT applicable at rate specified in clause 2(a) of Article 3 of Federal Decree-Law No. 47 of 2022.

27. Meaning of UAE’s Entity (GE) (Article I(xi))

• Govt. entity to include Federal’s govt. + Local’s govt. + ministries + govt.’s departments + govt.’s agencies + authorities + public institutions of Federal’s govt. + also Local’s govt. (all).

28. Meaning of UAE’s Controlled Entity (GCE) (Article I(xii))

• GCE to include any juridical person as directly + also indirectly wholly (100%) owned or controlled by govt. entity specified in decision taken by cabinet on suggestion of Minister (both).

29. Meaning of UAE’s Person (Article I(xiii))

• Person to include any natural person + also juridical person (both)

30. Meaning of UAE’s Business Activities (Article I(xiv))

• Business activities to include any transaction + activity + series of transactions + also series of activities conducted by person in course of business (all).

31. Meaning of UAE’s Mandate Activity (Article I(xv))

• Mandate activity to include any activity already conducted by govt. controlled entity under legal instrument establishing or regulating entity + also specified in decision issued by Cabinet on suggestion of Minister (both).

32. Meaning of UAE’s State’s Territory (Article I(xvi))

• State’s territory to include State’s lands + territorial sea + airspace (all).

33. Meaning of UAE’s Natural Resources (Article I(xvii))

• Natural Resources to include water + oil + gas + coal + naturally formed minerals + other non-renewable + non-living natural resources to be extracted from State’s territory (all).

34. Meaning of UAE’s Extractive Business (Article I(xviii))

• Extractive Business to include business + business activities for exploring + extracting + removing + otherwise producing + exploiting natural resources of UAE + any interest therein already determined by Minister (all).

35. Meaning of UAE’s Non-Extractive Natural Resource Business (Article I(xix))

• NENRB to include business + business activities for separating + treating + refining + processing + storing + transporting + marketing + distributing natural resources of UAE (all).

36. Meaning of UAE’s Qualifying Public Benefit Entity (QPBE) (Article I(xx))

• Qualifying Public Benefit Entity to include any entity matching with terms and conditions already specified in Article 9 of Federal Decree-Law No. 47 of 2022 + also listed in decision issued by Cabinet on suggestion of Minister (both).

37. Meaning of UAE’s Qualifying Investment funds (QIF) (Article I(xxi))

• QIF to include any entity with principal activity for issuing of investment interests to raise funds + pool investor funds + establish joint Investment funds with object to enable holder of investment interest to take benefit from profits or gains from entity’s acquisition + holding + management + disposal of investments under existing legislation + also matching with terms and conditions specified in Article 10 of Federal Decree-Law No. 47 of 2022 (all).

38. Meaning of UAE’s Exempt Persons (Article I(xxii))

• Exempt Persons to include person exempt from liability for CT specified in Article 4 of Federal Decree-Law No. 47 of 2022.

39. Meaning of UAE’s Taxable Persons (Article I(xxiii))

• Taxable Persons to include any person liable for CT under Federal Decree-Law No. 47 of 2022.

40. Meaning of UAE’s Licensing Authority (Article I(xxiv))

• Licensing Authority to include competent authority for licensing + authorizing any business + business activities in UAE (all).

41. Meaning of UAE’s License (Article I(xxv))

• License to include any document issued by Licensing Authority for any business + business activities to be conducted in UAE (both).

42. Meaning of UAE’s Taxable Incomes (Article I(xxvi))

• Taxable Income to include 100% taxable incomes liable for CT under Federal Decree-Law No. 47 of 2022.

43. Meaning of UAE’s Financial Year (Article I(xxvii))

• Financial Year to include period specified in Article 57 of Federal Decree-Law No. 47 of 2022.

44. Meaning of UAE’s Tax Return in UAE (Article I(xxviii))

• Tax Return to include 100% information’s already filed with authority for CT in prescribed form + in prescribed manner + any schedule + any attachment + any amendment (all).

45. Meaning of UAE’s Tax Period in UAE (Article I(xxix))

• Tax Period to include period specified for filling of Tax Return in UAE under Federal Decree-Law No. 47 of 2022

46. Meaning of UAE’s Related Parties (Article I(xxx))

• Related Parties to include any person associated with taxable persons already determined in Article 35(1) under Federal Decree-Law No. 47 of 2022.

47. Meaning of UAE’s Revenues (Article I(xxxi))

• Revenue to include gross amount of income already derived in tax Period.

48. Meaning of UAE’s Recognized Stock Exchange (Article I(xxxii))

• Recognized Stock Exchange to include any stock exchange already established in UAE + licensed + regulated by competent authority + any stock exchange already established outside UAE (all).

49. Meaning of UAE’s Resident Persons (Article I(xxxiii))

• Resident persons to include taxable persons specified in Article 11(3) of Federal Decree-Law No. 47 of 2022

50. Meaning of UAE’s Non-Resident Persons (Article I(xxxiv))

• Non-Resident persons to include taxable persons specified in Article 11(4) of Federal Decree-Law No. 47 of 2022

51. Meaning of UAE’s Free Zone (FZ) (Article I(xxxv))

• Free zone to include designated + defined geographic area in UAE + also specified in decision issued by Cabinet on suggestion of Minister (all).

52. Meaning of UAE’s Free Zone Person (FZP) (Article I(xxxvi))

• FZP to include juridical person already incorporated + established + otherwise registered in Free Zone + also branch of Non- Resident Persons registered in Free Zone (all).

53. Meaning of UAE’s Unincorporated Partnerships (UP) (Article I(xxxvii))

• Unincorporated partnerships (UP) to include relationship already established through contract between 2 persons + more than 2 persons like partnerships deed + trust deed + any other similar association of persons under existing legislation in UAE (all).

54. Meaning of UAE’s Permanent Establishment (PE) (Article I(xxxviii))

• Permanent Establishment to include place of business + other form of presence in UAE of Non-Resident Persons under Article 14 of Federal Decree-Law No. 47 of 2022

55. Meaning of UAE’s State Sourced Incomes (SSI) (Article I(xxxix))

• State Sourced Income to include incomes accruing + incomes derived from UAE specified in Article 13 of Federal Decree-Law No. 47 of 2022 (both).

56. Meaning of UAE’s Qualifying Free Zone Persons (QFZP) (Article I(xl))

• QFZP to include any FZP matching with terms and conditions specified in Article 18 + also not liable for CT under Article 3(2) of Federal Decree-Law No. 47 of 2022 (both).

57. Meaning of UAE’s Investment Managers (Article I(xli))

• Investment Managers to include any person providing brokerage + also investment management services under regulatory oversight of competent authority in UAE (both).

58. Meaning of UAE’s Corporate Tax Payable (Article I(xlii))

• CT payable to include CT become due for payment to FTA for 1 + also more than 1 tax periods (both).

59. Meaning of UAE’s Foreign Partnerships (Article I(xliii))

• Foreign Partnerships to include relationship already established through contract between 2 persons + more than 2 persons like partnership deed + trust deed + also any similar association of persons under existing laws in foreign jurisdiction (all).

60. Meaning of UAE’s Foreign Tax Credits (FTC) (Article I(xliv))

• FTC to include tax already paid under existing laws in foreign jurisdiction on incomes + profits to be deducted from CT computed under Article 47(2) of Federal Decree-Law No. 47 of 2022 (both).

61. Meaning of UAE’s Family Foundation (Article I(xlv))

• Family Foundation to include any foundation + trust + similar entity (all) fulfilling terms and conditions specified under Article 17 of Federal Decree-Law No. 47 of 2022.

62. Meaning of UAE’s Interest (Article I(xlvi))

• Interest to include any amount accrued + paid for use of monies + credits + discounts + premiums + profits paid against Islamic Financial Instrument (IFI) + other payments economically equivalent to interest + other amounts incurred for raising finance but excluding payments made for principal amount (all).

63. Meaning of UAE’s Accounting Incomes (Article I(xlvii))

• Accounting Income to include accounting net profit or net loss for accounting tax period in accordance financial statements prepared under Article 20 of Federal Decree-Law No. 47 of 2022.

64. Meaning of UAE’s Exempt Incomes (Article I(xlviii))

• Exempt Incomes to include any income exempt from CT under Federal Decree-Law No. 47 of 2022

65. Meaning of UAE’s Connected Persons (Article I(xlix))

• Connected Person to include any person affiliated with taxable persons determined under Article 36(2) of Federal Decree-Law No. 47 of 2022

66. Meaning of UAE’s Tax Losses (Article I(l))

• Tax loss to include any negative taxable income calculated for tax period under Federal Decree-Law No. 47 of 2022

67. Meaning of UAE’s Qualifying Business Activities (QBA) (Article I(li))

• Qualifying business activities (QBA) to include any activity specified in decision issued by Cabinet on suggestion of Minister

68. Meaning of UAE’s Foreign Permanent Establishment (FPE) (Article I(lii))

• Foreign Permanent Establishment (FPE) to include place of business + other form of presence outside UAE determined through criteria prescribed under Article 14 of Federal Decree-Law No. 47 of 2022

69. Meaning of UAE’s Market Values (Article I(liii))

• Market values to include price agreeable under arm’s-length free market transactions between 2 not related parties + also between 2 not connected persons in similar circumstances (both).

70. Meaning of UAE’s Qualifying Groups (QG) (Article I(liv))

• Qualifying groups to include 2 + also more than 2 taxable persons satisfying terms and conditions specified under Article 26(2) of Federal Decree-Law No. 47 of 2022.

71. Meaning of UAE’s Net Interest Expenditures (NIE) (Article I(lv))

• Net interest expenditure to include interest expenditure – (minus) interest income determined under Federal Decree-Law No. 47 of 2022.

72. Meaning of UAE’s Banks (Article I(lvi))

• Bank to include person already licensed in UAE as bank + finance institution + equivalent licensed activity for accepting deposits + granting loans defined under legislation of UAE (all).

73. Meaning of UAE’s Insurance Providers (Article I(lvii))

• Insurance provider to include person already licensed in UAE as insurance provider for accepting risks through entering into + carrying out contracts of insurance against life + non-life sectors + contracts of reinsurance + also captive insurance defined in legislation of UAE (all).

74. Meaning of UAE’s Controls (Article I(lvii))

• Control to include direction + influence over 1 person by another person with terms and conditions specified under Article 35(2) of Federal Decree-Law No. 47 of 2022 (both).

75. Meaning of UAE’s Tax Groups (TG) (Article I(lviii))

• Tax Groups to include 2 + more than 2 taxable persons treated as single taxable persons with terms and conditions specified under Article 40 of Federal Decree-Law No. 47 of 2022 (both).

76. Meaning of UAE’s Withholding Tax Credit (WTC) (Article I(lix))

• WTC to include CT to be deducted from total CT liability with terms and conditions specified under Article 46(2) of Federal Decree-Law No. 47 of 2022.

77. Meaning of UAE’s Withholding Tax (WT) (Article I(lx))

• WT to include CT to be withheld from UAE’s sourced income with terms and conditions specified under Article 45 of Federal Decree-Law No. 47 of 2022.

78. Meaning of UAE’s Tax Registrations (TR) (Article I(lxi))

• TR to include procedure for registering with FTA in UAE by taxable persons under Federal Decree-Law No. 47 of 2022.

79. Meaning of UAE’s Tax Registration Number (TRN) (Article I(lxii))

• TRN (similar to PAN in India) to include unique number to be issued by tax authorities to 100% persons already registered for CT in UAE.

80. Meaning of UAE’s Tax Deregistration (TD) (Article I(lxiii))

• TDS to include procedure for deregistering of CT by FTA in UAE.

81. Meaning of UAE’s Tax Procedures Laws (TPL) (Article I(lxiv))

• TPL to include federal law for governing tax procedures in UAE.

82. Meaning of UAE’s Administrative Penalties (AP) (Article I(lxv))

• AP to include amount already imposed + collected under Federal Decree-Law No. 47 of 2022 (both).

(E) UAE’s Corporate Tax (CT) + Rates for CT (both) (Chapter-II)

83. UAE’s CT payable on taxable incomes by taxable persons on tax period (Article 2)

 CT be imposed on taxable Incomes as determined + be paid to authority under Federal Decree-Law No. 47 of 2022 + also under Tax Procedures Laws (TPL) all.

84. UAE’s CT’s rates on taxable incomes by taxable persons on tax period (Article 3)

(i) Applicable rates for CT on taxable persons

(a) @ 0% when taxable incomes not exceeding amount specified in decision issued by cabinet on suggestion of Minister.

• Now amount specified not exceeding AED 3.75 lac

(b) @ 9% when taxable incomes exceeding amount specified in decision issued by cabinet on suggestion of Minister.

• Now amount specified exceeding AED 3.75 lac

(ii) Applicable rates for CT on QFZP

(a) @ 0% on qualifying incomes of QFZP.

(b) @ 9% on not qualifying incomes QFZP under Article 18 of Federal Decree-Law No. 47 of 2022 + also any decision by Cabinet on suggestion of Minister (both).

(F) UAE’s Exempt Persons for application of CT (Chapter-III)

85. UAE’s Exempt Persons (EP) (Article 4)

(i) List of Exempt Persons

(a) 100% govt.’s entities

(b) 100% ’s controlled entities

(c) 100% persons engaged in Extractive Business (EB) + also satisfying terms and conditions specified under Article 7 of Federal Decree-Law No. 47 of 2022 (both).

(d) 100% persons engaged in NENRB + also satisfying terms and conditions specified under Article 8 of Federal Decree-Law No. 47 of 2022 (both).

(e) 100% QPBE like charitable trust in India + also satisfying terms and conditions specified under Article 9 of Federal Decree-Law No. 47 of 2022 (both).

(f) 100% QIF + also satisfying terms and conditions specified under Article 10 of Federal Decree-Law No. 47 of 2022 (both).

(g) 100% Public Pension (PP) + Public Social Security Fund (PSSF) + Private Pension (PP) + Private Social Security Fund (PSSF) + also be under regulatory oversight of competent authority in UAE + also satisfying terms and conditions to be prescribed by Minister (all).

(h) 100% juridical persons incorporated in UAE + also wholly (100%) owned + controlled by Exempt Persons (EP) specified in Article 4 (1) (a) + (b) + (f) + (g) of Federal Decree-Law No. 47 of 2022 those conducting certain activities like :

(ha) Undertaking wholly (100%) + partly (not 100%) activities of EP.

(hb) Engaging 100% for holding assets + investing funds for benefit of EP.

(hc) Carrying ancillary activities for main activities being carried by EP.

(i) Any other person may be determined in decision issued by Cabinet on suggestion of Minister.

(ii) 100% persons mentioned under Article 4 (1) (a) + (b) + (c) + (d) although treated taxable persons for carrying business + business activities specified under Article 5 + 6 + 7 + 8 still be treated EP under Article 26 + 27 + 38 + 40 of Federal Decree-Law No. 47 of 2022 (all).

(iii) 100% persons mentioned under Article 4 (1) (f) + (g) + (h) + (i) required to apply to authority for exemptions from CT in form + in manner + in timeline prescribed by authority (all).

(iv) Exemptions from CT specified under Article 4 (1) (f) + (g) + (h) + (i) be effective from beginning of tax period specified in application for EP + also from any other date determined by authority (all).

(v) Any person seized to be EP from beginning of tax period when EP failed to meet any term and condition at any particular time during relevant tax period under Federal Decree-Law No. 47 of 2022.

(vi) Powers of Ministers

• Minister permitted to prescribe terms and conditions under Article 4(5) when EP permitted to continue or EP not permitted to continue from different date in certain circumstances like:

(a) When EP failed to meet terms and conditions because liquidation or termination of EP.

(b) When EP failed to meet terms and conditions which temporary in nature + quickly rectified + also appropriate procedures in place to monitor compliances with terms and conditions of Federal Decree-Law No. 47 of 2022 (all).

(c) When Minister prescribed any other circumstance.

86. UAE’s ’s Entities (GE) (Article 5)

(i) CT laws + also provisions of Federal Decree-Law No. 47 of 2022 (both) not applicable on govt.’s entities

(ii) CT laws + also provisions of Federal Decree-Law No. 47 of 2022 (both) applicable on govt.’s entities when conducting business + business activities under license issued by licensing authority in UAE.

+ (plus)

(iii) Govt.’s entities required to prepare separate financial statements for business + business activities + separate financial statements for govt.’s other activities (all).

+ (plus)

(iv) Govt’s entities to calculate taxable incomes separately from business + business activities for each tax period under Article 5(2) Federal Decree-Law No. 47 of 2022.

+ (plus)

(v) Related Parties Transactions (RPT)

• Govt.’s entities transactions between business + business activities specified under Article 5(2) and other activities be considered RPT specified under Article 34 of Federal Decree-Law No. 47 of 2022.

(vi) Application for treating Single Taxable Person (STP)

• Govt.’s entities permitted to apply to authority for treating STP for 100% businesses + business activities (together) specified under Federal Decree-Law No. 47 of 2022

87. UAE’s ’s Controlled Entities (GCE) (Article 6)

(i) CT laws + also provisions of Federal Decree-Law No. 47 of 2022 (both) not applicable on govt.’s controlled entities

(ii) CT laws + also provisions of Federal Decree-Law No. 47 of 2022 (both) applicable on govt.’s controlled entities when conducting business + business activities under license issued by licensing authority in UAE.

(iii) Independent business

(a) 100% business + business activities (both) conducted by govt.’s controlled entities be treated independent business when its not mandated activities

+ (plus)

(b) Govt.’s controlled entities required to prepare separate financial statements for business + business activities (both) when its not mandated activities.

(iv) Govt’s controlled entities to calculate taxable incomes separately from business + business activities (both) when its not mandated activities for each tax period under Article 6(2) Federal Decree-Law No. 47 of 2022.

(v) Related Parties Transactions (RPT)

• Govt.’s controlled entities transactions between business + business activities specified under Article 6(2) and other activities be considered RPT specified under Article 34 of Federal Decree-Law No. 47 of 2022.

88. UAE’s Extractive Business (EB) (Article 7)

(i) Application on CT extractive business (only)

• CT laws + also provisions of Federal Decree-Law No. 47 of 2022 (both) not applicable on extractive business when certain conditions already satisfied

(a) 100% persons permitted when directly + indirectly holding + having interest in right + in concession + also license issued by local govt. of UAE to undertake its extractive business (all).

+ (plus)

(b) 100% persons not permitted when not directly + indirectly holding + having interest in right + in concession + also license not issued by local govt. of UAE to undertake its extractive business (all).

+ (plus)

(c) 100% persons required to inform (to notify) to Ministry in forms + manners (both) agreed with local govt. of UAE.

(ii) Application on CT extractive business + other business (both)

• CT laws + also provisions of Federal Decree-Law No. 47 of 2022 not applicable on extractive business + other business (both) when certain conditions under Article 7(1) already satisfied

(a) Incomes earned (derived) from extractive business be calculated + be taxed under applicable legislation of UAE.

+ (plus)

(b) Incomes earned (derived) from other business be calculated + be taxed under Federal Decree-Law No. 47 of 2022.

+ (plus)

(c) Incomes earned (derived) from other business be exempted from CT when terms and conditions already satisfied as specified under Article 8 of Federal Decree-Law No. 47 of 2022.

(iii) CT when extractive business exceeding 95 % + other business not exceeding 5%

(a) CT not applicable when incomes from extractive business exceeding 95% + other business not exceeding 5% in 1 tax period

+ (plus)

(b) When other business be ancillary or incidental to extracting business (both)

(iv) Calculation of taxable income for CT on other business

(a) Other business be treated independent business + also separate financial statements be prepared (both).

+ (plus)

(b) Common expenditures be shared proportionately to taxable incomes in 1 tax period between extractive business and other business.

+ (plus)

(c) Common expenditures be shared in different proportion to taxable income in 1 tax period between extractive business and other business when different provisions already existed (applicable) under legislation of UAE

+ (plus)

(e) Taxable incomes from other business be calculated independently (separately) for each tax period under provisions of Federal Decree-Law No. 47 of 2022.

(v) Related Parties Transactions (RPT)

• Transactions between extractive business and other business be considered RPT under Article 34 except other business already exempted from CT under Article 8 of Federal Decree-Law No. 47 of 2022.

(vi) Taxable persons (tax payer) be considered subject to tax under UAE’s tax laws

• Taxable persons be considered effectively subject to tax under Article 7 when local govt. already imposed tax on incomes + profits + royalty + revenue tax + other form of tax + charge + levy (all) against extractive business in UAE.

(vii) Exemptions not permitted to contractors + subcontractors + suppliers + etc.

• Exemptions not permitted under Article 7 to contractors + subcontractors + suppliers + other person used + contemplated to be used for performance of extractive business those not have own rights to meet terms and conditions for exemption from CT under Article 7 + Article 8 of Federal Decree-Law No. 47 of 2022.

89. UAE’s Non-Extractive Natural Resource Business (NENRB) (Article 8)

(i) Exemptions from CT + provisions of Federal Decree-Law No. 47 of 2022

• Taxable persons permitted for exemptions from CT + provisions of Federal Decree-Law No. 47 of 2022 on income from NENRB when certain terms and conditions already satisfied like:

(a) When taxable persons directly + indirectly holding + has interest in right + concession + license (all) issued by local govt. to undertake NENRB in UAE.

+ (plus)

(b) Incomes from NENRB solely derived from undertaking business + business activities (both).

+ (plus)

(c) Taxable person’s incomes treated subject to tax under applicable legislation of UAE under Article 8(6) of Federal Decree-Law No. 47 of 2022.

+ (plus)

(d) Taxable persons already informed to ministry in form + in manner as agreed with local govt. (both).

(ii) CT on NENRB + on other business (both)

• Taxable persons permitted to take benefits available for incomes derived from Non-Extractive Natural Resource Business + on other business (both) when satisfying terms + conditions specified under Article 8 (1) of Federal Decree-Law No. 47 of 2022 like:

(a) Incomes derived from NENRB be calculated + be taxed under applicable legislation of UAE.

+ (plus)

(b) Incomes derived from other business be taxed except when other business satisfying terms and conditions for exemptions from CT specified under Article 7 of Federal Decree-Law No. 47 of 2022.

(iii) Exemptions from CT for other business incomes

(a) Others business incomes not to be charged to CT when other business conducted ancillary or incidental to NENRB + also revenue from other business not exceeding 5% of total revenue in 1 tax period (both)

+ (plus)

(b) Also revenue from NENRB be minimum 95% of total revenue in 1 tax period.

(iv) Computation for taxable income from other business

(a) Other business be treated independent business + also separate financial statements be prepared (both).

+ (plus)

(b) Also common expenditures be shared in proportion to their revenue in 1 tax period between Non-Extractive Natural Resource Business and other business

+ (plus)

(c) Also different proportion when permitted under applicable legislation of UAE for any specific expenditure between Non-Extractive Natural Resource Business

+ (plus)

(d) Also taxable persons required to calculate taxable income for other business independently for 1 tax period under provisions of Federal Decree-Law No. 47 of 2022.

(v) RPT between NENRB and other Business

• Transactions between NENRB and other business be considered RPT under Article 34 except other business specifically exempted from CT under Article 7 of Federal Decree-Law No. 47 of 2022.

(vi) Taxable persons be treated subject to tax under applicable legislation of UAE when local govt. already imposed tax on incomes + profits + royalties + revenue tax + any other form of tax + charge + levy (all) against Non-Extractive Natural Resource Business.

(v) Exemptions from CT not permitted for contractors + sub-contractors + suppliers + etc.

• Exemptions from CT not permitted for contractors + sub-contractors + suppliers + any other person actually used + contemplated used in any part of performance of NENRB without own rights to satisfy terms and conditions for exemptions from CT under Article 7 of Federal Decree-Law No. 47 of 2022

90. UAE’s Qualifying Public Benefit Entities (QPBE) (Article 9)

(i) QPBE permitted for exemptions from CT after satisfying certain conditions

• When QPBE established + also operated for certain activities like charitable + religious organizations in India under section 10(23) + 12 of Income Tax Act, 1961.

(a) When QPBE exclusively being used for religious + charitable + scientific + artistic + cultural + athletic + educational + healthcare + environmental + humanitarian + animal protection + any other similar purpose (all).

+ (plus)

(b) When QPBE exclusively being used as professional entity + chamber of commerce + any other similar entity for promotion of social welfares + public benefits (all).

+ (plus)

(c) When QPBE not conducting any business + business activities (both) except activities directly relating for fulfilling purpose of original establishment.

+ (plus)

(d) When QPBE’s incomes + assets exclusively be used for furtherance of purpose of original establishment + for payment to associated QPBE + for necessary + reasonable expenditures (all).

+ (plus)

(e) When QPBE’s incomes + assets not used for personal benefits of shareholders + members + trustees + founders + settlers (all).

+ (plus)

(f) When any further conditions not satisfied which may be prescribed in future’s decision to be issued by Cabinet on suggestion of Minister.

(ii) Exemptions under Article 9(1) of Federal Decree-Law No. 47 of 2022 be effective from beginning of tax period when QPBE listed in Cabinet’s decision issued on suggestion of Minister + any other date determined by Minister (both).

(iii) FTA under CT permitted to request any relevant information + records from QPBE within timeline specified by Authority for monitoring continued compliances by QPBE + conditions already prescribed under Article 9(1) of Federal Decree-Law No. 47 of 2022.

91. UAE’s Qualifying Investment funds (QIF) (Article 10)

(i) Investment funds permitted to apply to authority for exemptions from CT as QIF when certain conditions satisfied like:

(a) That UAE’s Investment funds + UAE investment fund’s manager be subject to regulatory oversight by competent authority in UAE + competent authority outside UAE (all).

+ (plus)

(b) Also interests in Investment funds be traded on recognized stock exchange or be marketed + also be available sufficiently to retail investors (both).

+ (plus)

(c) Also Investment funds not to be established for avoiding CT.

+ (plus)

(d) Also any other condition may be prescribed in decision issued by Cabinet on suggestion of Minister.

(ii) Powers of competent authorities for monitoring continued compliances by QIF

• Competent authority permitted to request for relevant information’s + records for monitoring continued compliances by QIF specified under Article 10 (1) of Federal Decree-Law No. 47 of 2022.

(G) UAE’s Taxable Persons + Corporate Tax Base for application of CT (Chapter-IV)

92. UAE’s Taxable Persons (TP) (Article 11)

(i) CT be imposed on taxable persons at rates determined under Federal Decree-Law No. 47 of 2022.

(ii) Taxable persons may be resident persons of UAE + also not resident persons of UAE (both) under Federal Decree-Law No. 47 of 2022.

(iii) Meaning of resident persons of UAE

(a) To include juridical person already incorporated + otherwise established + recognized + FZP under applicable legislation in UAE.

+ (plus)

(b) Also to include juridical person already incorporated + otherwise incorporated + otherwise established + recognized under applicable legislation outside UAE (foreign jurisdiction).

+ (plus)

(c) Also to include natural person conducting business + business activities (both) in UAE.

+ (plus)

(d) Also to include any other person may be determined in decision issued by cabinet on suggestion of Minister.

(iv) Meaning of non-resident persons of UAE

• To include not considered resident persons of UAE under Article 11(3) of Federal Decree-Law No. 47 of 2022

(a) Beside has PE in UAE under Article 14 of Federal Decree-Law No. 47 of 2022.

+ (plus)

(b) Beside derives UAE’s sourced incomes under Article 13 of Federal Decree-Law No. 47 of 2022.

+ (plus)

(c) Beside has nexus in UAE through specifying in decision issued by Cabinet on suggestion of Minister.

(v) Branch of person referred under Article 11(3) be treated 1 and same taxable persons in UAE.

(vi) Cabinet on suggestion of Minister + also in coordination with relevant competent authorities permitted to issue decision for specifying any category of business + business activities conducted by resident persons of UAE + non-resident persons of UAE to cover for CT under Federal Decree-Law No. 47 of 2022.

93. UAE’s Corporate Tax Base (CTB) (Article 12)

(i) CT on resident juridical person in UAE

• Resident juridical person liable for CT on taxable incomes derived from UAE + also derived from outside UAE (both) under Federal Decree-Law No. 47 of 2022.

(ii) CT on resident natural person in UAE

• Resident natural person liable for CT on taxable incomes derived from UAE + also derived from outside UAE when incomes derived from business + business activities conducted in UAE specified under Article 11(6) of Federal Decree-Law No. 47 of 2022 (all).

(iii) CT on non-resident persons in UAE

(a) When taxable incomes attributable to PE of Non-Resident Persons in UAE.

+ (plus)

(b) When UAE’s sourced incomes not attributable to PE of Non-Resident Persons in UAE.

+ (plus)

(c) When taxable incomes attributable to nexus of Non-Resident Persons in UAE determined in decision issued by Cabinet under Article 11(4)(c) of Federal Decree-Law No. 47 of 2022.

94. UAE’s State Sourced Incomes (SSI) (Article 13)

(i) Incomes be considered UAE’s sourced in certain circumstances like:

(a) When incomes derived from UAE’s resident persons.

+ (plus)

(b) When incomes derived from UAE’s non-resident persons + incomes derived + received + accrued (all) in connection with + also attributable to PE of same non-resident persons.

+ (plus)

(c) When incomes accrued + derived from activities performed + assets located + capital invested + rights used + services performed + also benefitted from or in UAE (all).

(ii) Minister’s powers to determine UAE’s sourced incomes without limitation

(a) Any income from sale of goods in UAE.

(b) Any income from supply (provision) of services when rendered + utilized + benefitted from or in UAE (all).

(c) Any income from contract when wholly (100%) + partly (not 100%) performed or benefitted from or in UAE (both).

(d) Any income from movable + immovable property (both) located in UAE.

(e) Any income from disposal of shares + capital (both) belonged to UAE’s resident persons.

(f) Any income from use + right to use in UAE + grant of permission to use in UAE + intellectual property + intangible property (all).

(g) Meaning of interest

(ga) Include interest on loan when secured by movable or immovable property located in UAE.

(gb) Borrower be resident persons in UAE.

(gc) Borrower be govt.’s entity in UAE.

(h) Meaning of Insurance premiums + reinsurance premiums (both)

(ha) Include premiums on insured asset located in UAE.

(hb) Include insured by resident persons in UAE.

(hc) Include insured activity be conducted in UAE.

95. UAE’s Permanent Establishment (PE) (Article 14)

(i) Special circumstances for non-resident persons have PE in UAE

(a) When has fixed place PE + permanent place of PE in UAE for conducting business + business activities for UAE’s non-resident persons as wholly (100%) or partly (not 100%) (all).

+ (plus)

(b) When person habitually exercising authority for conducting business + business activities in UAE on behalf of non-resident persons (both).

+ (plus)

(c) When UAE’s non-resident persons having any other form of nexus in UAE may be specified in decision issued by Cabinet on suggestion of Minister.

(ii) Meaning of fixed place + permanent place (both) in UAE

(a) Definite place of management where management + commercial decisions when considered necessary for conducting business + business activities being substantially taken (made).

(b) Any branch located in UAE

(c) Any office located in UAE

(d) Any factory located in UAE

(e) Any workshop located in UAE

(f) Any land + buildings + other real property (all) located in UAE.

(g) Any installation + structure for exploration of renewable + non-renewable natural resources (all) located in UAE.

(h) Any mines + oil well + gas well + quarry + any other place for extraction of natural resources + vessels + structures used for extraction (all) located in UAE.

(i) Any building site + construction project + place of assembly + installation + supervisory activities when site + project + activities separately or jointly with other sites + projects + activities + conducted by 1 + more than 1 related parties of UAE’s non-resident persons (all) continued for exceeding 6 month.

(iii) Special circumstances for non-resident persons has no PE in UAE

(a) When non-resident persons using any place located in UAE for storing + displaying + delivering of goods + also delivering of merchandise (all).

+ (plus)

(b) When non-resident persons using any place located in UAE for keeping stock of goods + stock of merchandise (both) for processing (only) by another person not for any other purpose like sale + etc.

+ (plus)

(c) When non-resident persons using any place located in UAE for purchasing goods + purchasing of merchandise + collecting information’s (all).

+ (plus)

(d) When non-resident persons using any place located in UAE for conducting any other activity of preparatory + auxiliary nature (both).

+ (plus)

(e) When non-resident persons using any place located in UAE for conducting any combination of activities mentioned under paragraph of (a) + (b) + (c) + (d) of Article 14 (3) if overall activities be preparatory or auxiliary nature (only).

(iv) Special circumstances for non-resident persons having PE in UAE

• When has fixed place PE + permanent place of PE being used + maintained by non-resident persons + by related parties for carrying any business + business activities at same place or at another place in UAE if certain conditions satisfied like

(a) When same place or other place already constituted PE of non-resident persons or related parties in UAE.

+ (plus)

(b) When overall activities from combination of activities carried by Non-Resident Persons + by related parties at same place or at 2 place not for preparatory or auxiliary nature + also together form cohesive Business operation (all).

(v) Meaning of considered having + habitually exercising authority to conduct business

• When person already considered having + habitually exercising authority for conducting business + business activities in UAE on behalf of non-resident persons if certain conditions satisfy like:

(a) When person habitually concluding contracts on behalf of non-resident persons in UAE.

+ (plus)

(b) When person habitually negotiating contracts which already concluded by non-resident persons without any material modification in already concluded contract.

(vi) Meaning of independent agent for not considering PE in UAE

(a) Independent agent not considered PE of non-resident persons for conducting business + business activities in UAE if acting in ordinary course except when exclusively (100%) + also almost exclusively (near to 100%) acting on behalf of non-resident persons (all).

+ (plus)

(b) Also when person cannot be considered legally or economically as independent agent for UAE’s non-resident persons.

(vii) Powers of Minister to prescribe conditions for not considering PE in UAE Minister permitted to prescribe conditions where mere presence of natural person not creating PE in UAE for non-resident persons certain circumstances:

(a) When prsence of temporary in nature + also in exceptional situation (both).

(b) When natural person employed by non-resident persons + also certain conditions satisfy (both) like:

(ba) That activities conducted in UAE by natural person not part of core income-generating activities of non-resident persons + also its related parties (both).

(bb) That non-resident persons not deriving UAE’s sourced incomes.

96. UAE’s Investment Managers Exemptions (IME) (Article 15)

(i) Investment managers be considered independent agent under Article 14(6) of Federal Decree-Law No. 47 of 2022 when acting on behalf of UAE’s non-resident persons + also satisfying 100% conditions (both) like:

When investment managers be engaged in business of providing investments management + brokerage services (both).

+ (plus)

(a) Also investment managers be subjected to regulatory oversight of competent authority located in UAE.

+ (plus)

(b) Also transactions be carried in ordinary course of Investment Manager’s Business.

+ (plus)

(c) Also investment managers be acted for transactions in independent capacity.

+ (plus)

(d) Also investment managers be transacted on Arm’s Length Principle (ALP) with UAE’s Non-Resident persons + also received compensation (charges) for providing services (both).

+ (plus)

(e) Also investment managers should not be UAE’s Non-Resident Person’s representative for other incomes + also transactions (both) which already subject to CT for same tax period in UAE.

+ (plus)

(f) Also any other condition may be prescribed in decision issued by cabinet on suggestion of Minister in UAE.

(ii) Meaning of transactions:

(a) To include transactions in commodities + immovable properties + bonds + shares + derivatives + also securities of any other description (all).

+ (plus)

(b) To include transactions for buying or selling (any) foreign currency + placement of funds on interest basis (both).

+ (plus)

(c) To include other transactions which already permissible for carrying by Investment Managers on behalf of Non-Resident Persons under applicable legislation in UAE.

97. UAE’s Partners in Unincorporated Partnerships (UP) (Article 16)

(i) UP entity not to be considered taxable persons + treated individual taxable persons except when application already made under Article 16(8) of Federal Decree-Law No. 47 of 2022 + also subject to further any conditions may be prescribed by Minister in UAE.

(ii) Status of partner to be treated in UP entity

(a) Treated that partner conducting business of UP.

+ (plus)

(b) Treated that partner having status + intention + purpose (all) for Unincorporated Partnerships.

+ (plus)

(c) Treated that partner holding assets of UP.

+ (plus)

(d) Treated that partner being party to 100% arrangements to be made by UP.

(iii) Assets + liabilities + incomes + expenditures + etc. (all) belonging to Unincorporated Partnerships be allocated to each partner in proportion to distributive share in Unincorporated Partnerships + also in any manner may be prescribed by Competent Authority in UAE when distributive share of partner can’t be identified.

(iv) Taxable Incomes of partners in UP be taken into account in certain manners like:

(e) 100% non interest expenditures already incurred directly by partner for conducting business of UP.

+ (plus)

(f) Also 100% interest expenditures already incurred by partner for contributing towards capital account of UP.

(vi) 100% amount for interest paid by UP to partner towards capital account be treated allocation of income to partner + also not to be deductible expenditure (both) for calculating taxable income of partner in Unincorporated Partnerships.

(vii) FTC (if any) be allocated to each partner in proportion to distributive share in UP for calculating + settling (both) against CT payable by partner of Unincorporated Partnerships under Chapter 13 of Federal Decree-Law No. 47 of 2022.

(viii) Foreign partnerships in Unincorporated Partnerships in UAE

• Foreign Partnerships be treated Unincorporated Partnerships under Federal Decree-Law No. 47 of 2022 when 100% following conditions already satisfied like:

(a) When foreign partnerships should not be subject to tax under prevailing laws in foreign jurisdiction outside UAE.

+ (plus)

(b) Also each partner in foreign partnerships be individually liable for tax against distributive share of incomes of foreign partnerships when incomes actually received or incomes not actually received but accrued (both) to foreign partnerships.

+ (plus)

(c) Also any other condition may be prescribed by Minister in UAE.

(viii) Partners in Unincorporated Partnerships permitted to make application to competent authority for Unincorporated Partnerships be treated taxable persons in UAE.

(ix) Impact of approval against application already applied under Article 16(8)

(a) Provisions applicable under Article 16(1) to 16(6) not to be applied to partners in Unincorporated Partnerships against business conducted by Unincorporated Partnerships in UAE.

+ (plus)

(b) Also each partner in Unincorporated Partnerships be jointly + severally (both) liable for CT Payable by Unincorporated Partnerships for those tax periods till partners continue in Unincorporated Partnerships in UAE.

+ (plus)

(c) Also 1 partner in Unincorporated Partnerships be appointed partner responsible for 100% legal obligations + proceedings (both) on behalf of Unincorporated Partnerships under Federal Decree-Law No. 47 of 2022.

(x) Status of approved unincorporated partnerships under Article 16(8)

• Unincorporated Partnerships be treated taxable persons from commencement of tax period in which application actually made or from commencement of future’s tax period or other date (any) determined by competent authority.

98. UAE’s Family Foundation (FF) (Article 17)

(i) Family foundation permitted to make application to competent authority for treating Unincorporated Partnerships under Federal Decree-Law No. 47 of 2022 when 100% conditions already satisfied like:

(a) That family foundation be established for benefiting to identified + identifiable natural persons + for benefiting to public benefit entities (all)

+ (plus)

(b) That principal activity of family foundation should be to receive + to hold + to invest + to disburse + otherwise to manage assets + funds associated with savings + investments (all).

+ (plus)

(c) That family foundation not permitted to conduct any activity similar to business + business activities specified under Article 11(6) of Federal Decree-Law No. 47 of 2022 + also not permitted to hold any assets directly + indirectly by founders + settlers + beneficiaries (all).

+ (plus)

(d) That main + principal (both) object should not be for avoidance of CT in UAE.

+ (plus)

(e) That any other condition may be prescribed by Minister in UAE.

(ii) Status of approved family foundation under Article 17(1)

• Family foundation be treated Unincorporated Partnerships from commencement of Tax Period in which application already made or from commencement of future’s tax period or other date (any) determined by competent authority.

(iii) Powers of competent authority for monitoring compliances by family foundation

(a) Competent authority permitted for monitoring continued compliances by family foundation specified under Article 17(1)

+ (plus)

(b) Competent authority permitted for requesting relevant information’s + records (both) from family foundation in timeline specified in request.

(H) UAE’s Free Zone Persons for application of CT (Chapter-V)

99. UAE’s Qualifying Free Zone Persons (QFZP) (Article 18)

(i) QFZP required to satisfy 100% conditions like:

(a) To maintain adequate economic substance in UAE.

+ (plus)

(b) Also to earn qualifying incomes specified in decision issued by Cabinet on suggestion of Minister in UAE.

+ (plus)

(c) Also not to liable for CT under Article 19 of Federal Decree-Law No.

+ (plus)

(d) Also to comply provisions specified under Articles 34 + 55 (both) of Federal Decree-Law No. 47 of 2022

+ (plus)

(e) Also to satisfy any other condition may be prescribed by Minister in UAE.

(ii) Impact for failure to satisfy specified conditions by QFZP in UAE

• QFZP liable for CT when failure to satisfy conditions specified under Article 18(1) of Federal Decree-Law No. 47 of 2022 from beginning of tax period.

(iii) Powers of Minister when QFZP failures satisfy specified conditions (Article 18(2))

• Minister permitted to prescribe conditions + circumstances (both) for allowing to continue QFZP status or to seize QFZP status (any) from different date

(iv) Rights of QFZP in UAE (Article 3(2)(a))

(a) QFZP be permitted to apply for remaining period of tax incentives stipulated in applicable legislation of free zones where QFZP already registered

+ (plus)

(b) Also Free zone authority permitted to extent period with or without any additional condition specified in decision issued by cabinet on suggestion of Minister

+ (plus)

(c) Also permitted maximum period not to exceed 50 year.

100. UAE’s Option for Choosing to be subject to CT (Article 19)

(i) QFZP permitting for opting CT at rate specified under Article 3(1) of Federal Decree-Law No. 47 of 2022 instead of 0% tax incentive already available for QFZP.

(ii) Effective date for opting CT

(a) Effective date be commenced from date for opting CT during tax period.

Or

(b) Effective date be commenced from tax period following tax period in when opted for CT.

(I) UAE’s Computing Taxable Incomes for application of CT (Chapter-VI)

101. UAE’s General Rules for Computing Taxable Income (Article 20)

(i) Taxable incomes for each taxable persons be determined separately based on adequate + standalone financial statements (both) prepared for financial reporting under accounting standards accepted in UAE.

(ii) Taxable incomes for each tax period be accounting incomes + also applicable + adjusted (all) for certain reasons like:

(a) 100% unrealized gains + losses specified under Article 20(3) of Federal Decree-Law No. 47 of 2022

+ (plus)

(b) 100% exempted incomes specified under Chapter 7 of Federal Decree-Law No. 47 of 2022.

+ (plus)

(c) 100% reliefs specified under Chapter 8 of Federal Decree-Law No. 47 of 2022.

+ (plus)

(d) 100% deductions specified under Chapter 9 of Federal Decree-Law No. 47.

+ (plus)

(e) 100% transactions with related parties + connected persons (both) specified under Chapter 10 of Federal Decree-Law No. 47 of 2022

+ (plus)

(f) 100% tax loss reliefs specified under Chapter 11 of Federal Decree-Law No. 47 of 2022.

+ (plus)

(g) 100% special incentives + special reliefs for QBA may be specified in decision issued by Cabinet on suggestion of Minister.

+ (plus)

(h) 100% incomes + expenditures (both) not taken into account for computing taxable incomes under provisions of Federal Decree-Law No. 47 of 2022 may be specified in decision issued by cabinet on suggestion of Minister.

+ (plus)

(i) 100% other adjustments may be specified in decision issued by cabinet on suggestion of Minister.

(iii) Powers of Minister for prescribing financial statement on accrual basis

(a) Minister permitted to prescribe for calculating taxable incomes against relevant tax period + also subject to any condition (both)

+ (plus)

(b) Also permitted to prescribe for preparing financial statements on accrual basis by taxable persons

+ (plus)

(c) Also permitted to prescribe for accounting 100% gains + 100% losses (both) on realization basis like

(ca) 100% assets + liabilities be subject to fair value + impairment accounting (all) under applicable accounting standards

or

(cb) 100% assets + liabilities be held on capital account at end of tax period + also be taken into account unrealized gains or unrealized losses (any) against assets + liabilities (all) already held on revenue account at end of same tax period.

(iv) Meaning of words used under Article 20(3) of Federal Decree-Law No. 47 of 2022

(a) Meaning of assets held on capital account

• To include assets in which taxable persons not trading + also eligible for depreciation or assets being treated under applicable accounting standards like property + plant and equipment + investment property + intangible assets + other non-current assets (all).

(b) Meaning of liabilities held on capital account

• To include liabilities which do not permitted for allowing revenue expenditures under Chapter 9 of Federal Decree-Law No. 47 of 2022 or liabilities be treated under applicable accounting standards like non-current liabilities.

(c) Meaning of assets + liabilities (both) held on revenue account

To include assets + liabilities other than those held on capital account.

(d) Meaning of unrealized gains + unrealized losses (both)

To include unrealized gains + unrealized losses against unrealized foreign exchange gains + foreign exchange losses (all).

(v) Powers of Minister to prescribe solutions under Federal Decree-Law No. 47 of 2022

(a) Minister permitted to prescribe circumstances + conditions (both) when taxable persons desired for preparing financial statements using cash basis accounting.

(b) Minister permitted to prescribe adjustments to accounting standards to be applied for computing taxable incomes for tax period.

(c) Minister permitted to prescribe different basis for computing taxable incomes of QBA.

(vi) Rights of taxable persons under Federal Decree-Law No. 47 of 2022

• Taxable persons permitted to make application to competent authority for changing method of accounting from cash basis to accrual basis from commencement of tax period in which application made or from commencement of future’s tax period subject to any condition may be prescribed under Article 20(5) of Federal Decree-Law No. 47 of 2022.

(vii) Overriding provisions of Federal Decree-Law No. 47 over accounting standards

• Provisions under Federal Decree-Law No. 47 of 2022 be applied when conflict existed between provisions of Decree-Law and accounting standards.

102. UAE’s Small Business Reliefs (SBR) (Article 21)

(i) UAE’s resident taxable persons permitted for opting to be treated not having any taxable income for tax period in certain circumstances like:

(a) When revenue of taxable persons for relevant tax period + also previous tax periods (both) not exceeding threshold limit already prescribed by Minister in UAE.

+ (plus)

(b) Also taxable persons satisfying 100% conditions already prescribed by Minister in UAE.

(ii) Exemptions from provisions for taxable persons under Federal Decree-Law No. 47

• Taxable persons permitted for exemptions from application of provisions for taxable persons under Federal Decree-Law No. 47 of 2022 when Article 21(1) applied like:

(a) That incomes not taxable specified under Chapter 7 of Federal Decree-Law No. 47 of 2022.

(b) That reliefs not available specified under Chapter 8 of Federal Decree-Law No. 47 of 2022.

(c) That deductions not permissible specified under Chapter 9 of Federal Decree-Law No. 47 of 2022.

(d) That tax Loss reliefs not permissible specified under Chapter 11 of Federal Decree-Law No. 47 of 2022.

(e) That provisions not applicable specified under Article 55 of Federal Decree-Law No. 47 of 2022.

(iii) (a) Competent authority permitted to take necessary measures to verify compliances with conditions specified under Article 21(1) of Federal Decree-Law No. 47 of 2022

+ (plus)

(b) Also permitted to request for relevant information’s + records (both) from taxable persons in timeline already prescribed in request.

(J) UAE’s Exempt Incomes for application of CT (Chapter-VII)

103. UAE’s Exempt Incomes (EI) (Article 22)

Certain incomes + related expenditures (both) not to be taken into account for computing taxable incomes of taxable persons in tax period in UAE like:

(i) Dividends + other profit distributions (both) received from juridical resident persons.

(ii) Dividends + other profit distributions (both) received from participating interest in foreign juridical person specified under Article 23 of Federal Decree-Law No. 47 of 2022.

(iii) Other incomes from participating interest specified under Article 23 of Federal Decree-Law No. 47 of 2022.

(iv) Incomes of FPE after satisfying 100% conditions specified under Article 24 of Federal Decree-Law No. 47 of 2022.

(v) Incomes earned (derived) by UAE’s Non-Resident Persons from operating aircrafts + ships (both) for international transportations after satisfying 100% conditions specified under Article 25 of Federal Decree-Law No. 47 of 2022.

104. UAE’s Participation Exemptions (PE) (Article 23)

(i) Incomes from participating interest be exempted from CT after satisfying 100% conditions specified under Article 23 of Federal Decree-Law No. 47 of 2022.

(ii) Meaning of participating interest in share or capital of judicial person

• To include minimum 5% ownership interest in share or capital of judicial person after satisfying 100% conditions specified under Article 23 of Federal Decree-Law No. 47 of 2022 like:

(a) When taxable persons already holding or has intention to hold participating interest for uninterrupted meaning of period of 12 month.

+ (plus)

(b) When participation already subject to CT or any other tax imposed under applicable legislation of country or territory where juridical person is resident similar to CT at rate not less than rate specified under Article 3(1) (b) of Federal Decree-Law No. 47 of 2022 like 9% in UAE.

+ (plus)

(c) When ownership interest in participation permitting taxable persons to receive minimum 5% of profits available for distribution by participation + also to receive minimum 5% of liquidation proceeds on cessation of participation (both).

+ (plus)

(d) When participation consisting ownership interest + entitlements for minimum 50% of direct assets + indirect assets (both) + also not qualified for exemptions from CT under Article 23 if held directly by taxable persons subject to any condition may be prescribed under Article 23(2)(e) of Federal Decree-Law No. 47 of 2022 .

+ (plus)

(e) When any condition may be prescribed by Minister in UAE.

(iii) Satisfaction of conditions for participation

• Satisfaction of conditions for participation be treated when 100% specified conditions under Article 23(2)(b) already satisfied like:

(a)When principal objectives + activities (both) for participation of acquisition + holding of shares + also equitable interests (all) satisfied.

+ (plus)

(b) When incomes of participation earned (derived) during relevant tax period(s) substantially (around 100%) consisting of incomes from participating interests.

(iv) Participation in QFZP + Exempt Persons (both) be treated already satisfied conditions specified under Article 23(2)(b) + also any condition may be prescribed by Minister (all).

(v) Conditions for not considering certain incomes for computing taxable incomes

(a) When 100% dividends + other profit distributions (both) received from foreign participation through UAE’s not resident persons under Article 11(3)(b) of Federal Decree-Law No. 47 of 2022.

+ (plus)

(b) When 100% gains + losses on transfer + sale + other disposition of wholly (100%) participating interest + partly (not 100%) participating interest derived after expiry of timeline specified under Article 9(2)(a) of Federal Decree-Law No. 47 of 2022 (all).

+ (plus)

(c) When 100% foreign exchange gains + losses (both) against participating interest.

+ (plus)

(d) When 100% impairment gains + losses (both) against participating interest.

(vi) Income’s exemptions not permitted for taxable persons from participating interest

(a) When participation permitted to claim deductions against dividend + other distributions (both) made to taxable persons under applicable tax legislation in UAE.

+ (plus)

(b) When taxable persons already recognized deductible impairment losses against participating interest before participating interest satisfying conditions specified under Article 23 (2) of Federal Decree-Law No. 47 of 2022

+ (plus)

(c) When taxable persons + its related parties already subject to CT + also recognized deductible impairment losses (all) against loan receivables from participation.

(vii) Impact against reversal for impairment losses in subsequent tax period

• Associated incomes of taxable persons be exempted from CT in subsequent tax period up to amount of incomes earned (derived) from participating interest which was also not exempted under Article 23 (6)(c) of Federal Decree-Law No. 47

(viii) Exemptions under Article 23 not permitted against losses realized on liquidation of participation.

(ix) Exemptions under Article 23 not permitted for period of 2 year when participation already acquired through exchange for transfer of ownership interest + also satisfied conditions specified under Article 23(2) + transfer exempted under Article 26 or 27 (any) of Federal Decree-Law No. 47 of 2022.

(x) Impact for not holding 5% ownership interest for computing taxable incomes

• Taxable incomes be included for computing CT’s liability when taxable persons not holding minimum 5% ownership interest in participation for uninterrupted minimum period of 12 month beside taxable incomes not included in previous tax period where holding of ownership interest was exceeding minimum 5%.

(xi) Powers of Minister for prescribing minimum ownership requirement

• Minister permitted to prescribe for ownership interest in shares or capital of juridical person when satisfying minimum ownership requirement under Article 23(2) where acquisition’s cost of ownership interest exceeding threshold limit specified by Minister in UAE.

105. UAE’s Foreign Permanent Establishment Exemptions (FPEE) (Article 24)

(i) UAE’s resident persons permitted for not taking into account incomes + also associated expenditures (both) against foreign PE located outside UAE for computing net taxable incomes in UAE.

(ii) UAE’s resident persons not permitted for computing taxable incomes + CT (both) like

(a) 100% losses belonging to foreign PE located outside UAE for computing CT in UAE beside same foreign PE was resident persons under Federal Decree-Law No. 47 of 2022

+ (plus)

(b) Also 100% positive incomes + associated expenditures (both) belongings to foreign PE located outside UAE beside same foreign PE was resident persons under Federal Decree-Law No. 47 of 2022

+ (plus)

(c) Also 100% FTC when UAE’s resident persons who already opted for not taking into account incomes + also associated expenditures (both) against Foreign PE located outside UAE for computing net taxable incomes in UAE

(iii) Meaning of incomes + associated expenditures for foreign PE located outside UAE

• To include positive incomes + associated expenditures (both) belongings to UAE’s taxable person’s foreign PE for each tax period in foreign jurisdictions located outside UAE.

(iv) Resident persons + foreign PE be treated separate + independent person (all)

• Resident persons + foreign PE be treated separate + independent person (all) for computing positive incomes + associated expenditures belongings to foreign PE located outside UAE.

(v) Transfer of assets + liabilities (both) between UAE’s resident persons and foreign PE

• Transfer of assets + liabilities (both) between UAE’s resident persons and its foreign PE located outside UAE be treated at Market Values on date of transfer for computing taxable incomes in UAE.

(vi) Terms and conditions for obtaining foreign PE exemptions for CT in UAE

• Exemptions under Article 24(1) permitted for 100% foreign PE located outside UAE after satisfying conditions specified under Article 24(7) of Federal Decree-Law No. 47 of 2022.

(vii) Exemptions under Article 24(1) permitted to foreign PE when Corporate Tax (CT) or other tax in foreign jurisdiction located outside UAE should not be lower than rate specified under Article 3 (1)(b) of Federal Decree-Law No. 47 of 2022 like 9% specified for CT in UAE.

106. UAE’s NRP Operating Aircrafts + Ships in International Transportation (Article 25)

• Incomes earned (derived) by UAE’s Non-Resident Persons through operation of aircrafts + ships (both) in international transportation permitted for exemptions from CT when certain conditions already satisfied like:

(i) When UAE’s Non-Resident Persons engaged in certain businesses like:

(a) International transport of passengers + live stocks + mails + parcels + merchandise + goods through air + also sea (all).

+ (plus)

(b) Also leasing + chartering (both) for aircrafts + ships to be used for international transportation.

+ (plus)

(c) Also leasing of equipment being integral to seaworthiness of ships + also airworthiness of aircrafts to be used for international transportation (both).

(ii) UAE’s resident persons performing activities specified under Article 25(1) of Federal Decree-Law No. 47 of 2022 permitted for exemptions from CT in UAE when similar activities already taxed under applicable legislation of country or territory in which non-resident persons presently residing.

(K) UAE’s Reliefs for application of CT (Chapter-VIII)

107. UAE’s Transfers within Qualifying Groups (Article 26)

(i) Members of same qualifying groups permitted for not taking capital gains or capital losses for computing taxable incomes against transfer of 1 or more than 1 assets or liabilities between 2 members of same qualifying group.

(ii) Meaning of 2 members of same qualifying groups

• 2 taxable persons be treated members of same qualifying groups when certain 100% conditions satisfied like:

(a) When 2 taxable persons should be juridical resident persons + non-resident persons (both) + also having PE located in UAE.

+ (plus)

(b) Also 1^st taxable persons should hold directly + also indirectly (both) ownership interest for minimum 75% in 2^nd taxable persons

Or

(c) When 3^rd taxable persons should hold directly + also indirectly (both) ownership interest for minimum 75% in 1^st + 2^nd (both) taxable persons.

+ (plus)

(c) When 1^st + 2^nd + 3^rd (all) taxable persons should be exempted persons under Federal Decree-Law No. 47 of 2022 in UAE.

+ (plus)

(d) When 1^st + 2^nd + 3^rd (all) taxable persons should not be QFZP in UAE.

+ (plus)

(e) When financial year of all taxable persons should be closed on same date in UAE.

+ (plus)

(f) When both taxable persons should be prepared their financial statements using same accounting standards in UAE.

(iii) Conditions be satisfied by taxable persons when Article 26(1) applied like :

(a) Assets + liabilities be treated transferred at net book value at time of transfer without accounting of capital gains + also capital losses (all)

+ (plus)

(b)Value of consideration paid + received against transfer of assets + liabilities be treated at net book value at time of transferred (all).

(iv) Conditions for non application of provisions under Article 26(1) within 2 year

(a) When subsequent transfer of assets + liabilities (both) made to non same qualifying group.

+ (plus)

(b) When taxable persons already ceased to be members of same qualifying group

(v) Accounting at Market Values for transfer of assets + liabilities under Article 26(4)

• Accounting be at Market Values for transfer of assets + liabilities under Article 26(4) for computing taxable incomes of both taxable persons for relevant tax period.

108. UAE’s Business Restructuring Reliefs (BRR) (Article 27)

(i) Taxable persons permitted for not taking capital gains + capital losses (both) against business restructuring for computing taxable incomes after satisfying certain conditions like:

(a) When 100% business + 100% independent units of its business (both) transferred to taxable persons against transfer in exchange for shares or other ownership interests of taxable persons (transferee).

+ (plus)

(b) Also when 1 or more than 1 taxable persons transferred 100% business to taxable persons against exchange for shares + also other ownership interest of taxable persons (transferee)

(iii) 100% conditions be satisfied for transfer under Article 27(1) like:

(a) When transfer undertaken under applicable legislation in UAE + also satisfied 100% conditions already prescribed.

+ (plus)

(b) Also resident taxable persons + also non-resident taxable persons (both) having PE located in UAE.

+ (plus)

(c) Also 0% persons treated Exempt Persons in UAE.

+ (plus)

(d) Also 0% persons treated QFZP in UAE.

+ (plus)

(e) Also financial year of 100% taxable persons closing on same date in UAE.

+ (plus)

(f) Also 100% taxable persons preparing their financial statements based on same accounting standards.

+ (plus)

(g) Also 100% transfers be undertaken for valid commercial reasons + also other non-fiscal reasons (both) to justify economic reality (viability)

(iii) 100% Conditions be satisfied for transfer under Federal Decree-Law No. 47 like:

(a) 100% assets + liabilities be transferred at their net book value at time of transfer to avoid question for capital gains + also capital losses (all)

+ (plus)

(b) Also 100% value of shares + ownership interests + other considerations received not to exceed book value of 100% assets + 100% liabilities (all) already transferred under Article 27 (1)(a).

+ (plus)

(c) Also 100% value of shares + ownership interests + other considerations received not to exceed book value of 100% assets + 100% liabilities (all) already transferred under Article 27 (1)(b).

+ (plus)

(d) Also 100% unutilized (carry forwarded) tax losses incurred by taxable persons (transferor) prior tax period in which transfer took place after satisfying conditions by transferor to be prescribed by Minister

+ (plus)

(e) Also transferee permitted to utilize 100% unutilized (carry forwarded) tax losses incurred by taxable persons (transferor) prior tax period in which transfer took place after satisfying conditions by transferor to be prescribed by Minister

(iv) Application of provisions under Article 27(1) for payment + receipts by other persons

(a) When shares + ownership interests + other considerations (all) received by person other than taxable persons (transferor)

+ (plus)

(b) Also shares + ownership interests + other considerations (all) paid by person other than taxable persons (transferee)

+ (plus)

(c) Also shares + ownership interests + other considerations (all) received by partner in unincorporated partnerships (transferor) already treated taxable persons under Article 16(9) of Federal Decree-Law No. 47 of 2022.

(v) Proportionate utilization of unutilized (carry forwarded) tax losses

• l Taxable persons (transferor) of independent units of business permitted to attribute proportionate unutilized tax losses after transfer of independent units of its business under Article 27(3)(d) of Federal Decree-Law No. 47 of 2022.

(vi) Provisions not applicable within 2 year from date of transfer like:

(a) When shares + other ownership interests + other considerations (all) already received by transferor being sold + transferred + otherwise disposed 100% + disposed not 100% to non member of qualifying group

+ (plus)

(b) Also subsequent transfer + subsequent disposal of 100% business or independent units of its business.

(vii) Accounting against transfer of assets + liabilities at market values on date of transfer

• Transfer of 100% assets + liabilities of business + independent units (all) be treated at market values on date of transfer under Article 27(6) of Federal Decree-Law No. 47 of 2022.

(L) UAE’s Deductions for application of CT (Chapter-IX)

109. UAE’s Deductible Expenditures (DE) (Article 28)

(i) 100% Permissible expenditures for taxable persons business in UAE

• All expenditures incurred wholly (100%) + also exclusively (both) for taxable person’s business except capital expenditures incurred for business be permissible in relevant tax period under Federal Decree-Law No. 47 of 2022.

(ii) 100% Not permissible expenditures for taxable persons business in UAE like:

(a) All expenditures not incurred for taxable person’s business.

(b) All expenditures incurred for earning exempt income.

(c) All losses not incurred for taxable person’s business.

(d) All expenditures incurred which may be specified in decision issued by cabinet on suggestion of Minister.

(iii) Proportionately permissible expenditures for taxable persons business in UAE like:

(a) All identifiable proportion of expenditure incurred wholly (100%) + also exclusively for deriving taxable incomes.

+ (plus)

(b) Also all unidentifiable proportion of expenditure be proportionately divided based on fair + reasonable facts + circumstance (all).

110. UAE’s Interest Expenditures (IE) (Article 29)

• Interest expenditures be deductible in tax period in which incurred subject to satisfaction of other provisions specified under Article 28 + 30 + 31 (all) of Federal Decree-Law No. 47 of 2022.

111. UAE’s General Interest Deduction Limitation Rule (Article 30)

(i) Taxable person’s net interest expenditures be deductible maximum 30% of accounting earnings before deduction of interest + tax (CT) + depreciation + amortization (EBITDA) for tax period excluding exempt incomes under Article 22 of Federal Decree-Law No. 47 of 2022.

(ii) Meaning of taxable person’s net interest expenditures in UAE

• To include amount incurred during tax period + also amount of net interest expenditure carried forwarded from last year’s (both) should not to exceed taxable interest incomes derived during same period under Article 30(4) of Federal Decree-Law No. 47 of 2022.

(iii) Limitation for deduction against net interest expenditures

• Minister permitted to specify amount for maximum deduction against net interest expenditures of taxable persons for tax period under Article 30(1) of Federal Decree-Law No. 47 of 2022.

(iv) Carry forward + deduction in subsequent 10 tax period for net interest expenditures

• Taxable persons permitted to carry forward + deduction (both) in subsequent 10 tax period against net interest expenditures for amount of net interest expenditure disallowed under Article 30(1) subject to Article 30(1) + 30(2) of Federal Decree-Law No. 47 of 2022.

(v) Interest expenditure already disallowed under any other provision be excluded from calculation of net interest expenditure under Article 30(2) of Federal Decree-Law No. 47 of 2022.

(vi) Disallowances not permitted specified under Article 30(1) to 30(5) for certain entities like:

(a) 100% banks located in UAE.

(b) 100% insurance providers located in UAE.

(c) 100% natural persons those engaged in business + business activities (both) in UAE.

(d) Any other person may be specified by Minister in UAE.

(e) Minister permitted to issue decision for specifying application under Article 30(1) + 30(2) to taxable persons related to 1 + more than 1 persons through ownership or control + also obligation on them for financial statements to be consolidated under applicable accounting standards in UAE.

112. UAE’s Specific Interest Deduction Limitation Rule (Article 31)

(i) Deduction not permitted for interest expenditures on loans from related parties

Deduction not permitted for interest expenditures on loans obtained directly + indirectly (both) from related parties against certain transactions like:

(a) 100% dividends + also profit distribution (both) to related parties.

(b) 100% redemptions + repurchases + reductions + return of share capitals (all) to related parties.

(c) 100% capital contributions to related parties.

(d) 100% acquisitions for ownership interest from related parties

(ii) Certain facts when Article 31(1) not applicable for disallowance of interest

• Provisions specified under Article 31(1) not applicable when taxable persons able to demonstrate that main purpose for obtaining loans to carry certain transactions specified under Article 31(1) not for gaining advantages from liabilities of CT.

(iii) Meaning of deemed Corporate Tax (CT) advantages by taxable person

• To include deemed advantages under Article 31(2) when related parties not subject to CT or similar nature of tax already applicable under legislation in foreign jurisdiction outside UAE on interest @ lower than CT rate specified under Article 3(1)(b) of Federal Decree-Law No. 47 of 2022 like presently 9% specified for UAE.

113. UAE’s Entertainment Expenditures (EE)( (Article 32)

(i) Taxable persons permitted to claim maximum 50% against certain expenditures like

(a) Maximum 50% against expenditures on entertainments

(b) Maximum 50% against expenditures on amusements

(c) Maximum 50% against expenditures on recreations

(ii) Permissible expenditures on entertainments for customers + shareholders + suppliers

• Taxable persons permitted to claim maximum 100% against expenditures on entertainments for customers + shareholders + suppliers + business partners (all) for certain purposes like:

(a) For meals

(b) For accommodations

(c) For transportations

(d) For admission fees

(e) For facilities + equipments (both) used for entertainments + amusements + recreations (all).

(f) For other expenditures may be specified by Minister in UAE.

114. UAE’s Non Deductible Expenditures (NDE) (Article 33)

• Deduction not permitted against certain expenditures like:

(i) Donations + grants + also gifts (all) made to non Qualifying Public Benefit Entity (QPBE).

(ii) Fines + penalties except amounts awarded for compensation against damages + also breaches of contracts (all).

(iii) Bribes + also other illicit payments (both).

(iv) Dividends + profit distributions + also benefits of similar nature (all) paid to taxable persons.

(v) Amounts withdrawn from business by natural taxable persons specified under Article 11(3)(c) of Federal Decree-Law No. 47 of 2022 + also by partner unincorporated partnerships (both).

(vi) CT imposed on taxable persons under Federal Decree-Law No. 47 of 2022.

(vii) Recoverable input Value Added Tax (VAT) by taxable persons under Federal Decree-Law No. (8) of 2017.

(viii) Tax on incomes imposed on taxable persons located outside UAE.

(ix) Other expenditures may be specified in decision issued by Cabinet on suggestion of Minister.

(M) UAE’s Transactions with Related Parties + Connected Persons (Chapter-X)

115. UAE’s Arm’s Length Standard (ALS) like ALP in India (Article 34)

(i) Arm Length Standards (ALS) specified under Article 34 (2) to (5) be used for computing taxable incomes + transactions + arrangements between minimum 2 related parties + also conditions be satisfied which may be prescribed in decision issued by authority (all).

(ii) 100% transactions + arrangements between minimum 2 related parties be made at ALS for comparing with transactions + arrangements made with non related parties under similar circumstances (all).

(iii) Methods for computing ALS for transactions + arrangements between related parties

(a) Comparable Uncontrolled Price (CUP) method.

(b) Resale Price (RP) method.

(c) Cost-Plus (CP) method.

(d) Transactional Net Margin (TNM) method.

(e) Transactional Profit Split (TPS) method.

• Combination of abovementioned 5 methods also permitted for computing ALS

(iv) Taxable persons permitted to apply for other TP method when taxable persons able to demonstrate that abovementioned 5 method can’t be applied for determining on ALS + also other method to be used already satisfied conditions specified under Article 34(2) of Federal Decree-Law No. 47 of 2022.

(v) Choice + application (both) for TP method or combination of TP methods specified under Article 34(3) or 34(4) be most reliable (appropriate) + also be considered certain factors like:

(a) Contractual terms of transactions + also arrangements (both).

(b) Characteristics of transactions + also arrangements (both).

(c) Economic circumstances for transactions + also arrangements to be conducted.

(d) Functions performed + assets employed + risks assumed by related parties for entering into transactions + also arrangements (all).

(e) Business strategies already employed by related parties for entering into transactions + also arrangements (both).

(vi) Powers of tax authorities for examining of ALS properly computed through TP

• FTA permitted for examining that ALS properly computed through TP method based on provisions specified under Article 34(3) or 34(4) + also special factors mentioned under Article 34(5) of Federal Decree-Law No. 47.

(vii) Meaning of Arm Length Range (ALR) for financial results

• To include ALR for financial results + indicators (both) acceptable for establishing ALS for transactions + arrangements between minimum 2 related parties + subject to conditions may be specified in decisions to be issued by authority for application of selected TP method + combination of TP methods under Article 34(3) or 34(4) of Federal Decree-Law No. 47 of 2022.

(vii) Powers of tax authority to adjust taxable incomes to achieve ALS based on facts

• FTA permitted to adjust taxable incomes of taxable persons to achieve ALS based on facts + circumstances of transactions + arrangements when computed price not arrived within ALR.

(viii) Duties of tax authority against adjustments made in computed ALS

(ix) FTA required to provide information’s + documents + evidences (all) relied for adjustments already made in taxable incomes of taxable persons under Article 34(8) of Federal Decree-Law No. 47 of 2022

• Powers of tax authority for adjustments after adjustments made by taxable persons

(x) FTA permitted to make further adjustments to taxable incomes of related parties beside FTA + taxable persons already adjusted taxable incomes against transactions + arrangements (all) to meet ALS.

• Rights of taxable persons against adjustments made by foreign competent authority

(xi) Taxable persons permitted to make application to FTA in UAE for corresponding adjustments to his taxable incomes when foreign competent authority located already made adjustments in his taxable incomes outside UAE against transactions + arrangements (both).

116. UAE’s Related Parties + Controls (Article 35)

(i) Meaning of related parties + natural + juridical person + 2 or more juridical person

(a) Meaning of related parties

• To include 2 or more than 2 natural persons those already related 4^th degree of kinship + affiliation + adoption + also guardianship (all).

(b) Meaning of natural person

(ba) To include natural person + 1 or more than 1 related party of natural person already shareholders in juridical person + natural person alone + together with related parties directly + indirectly owning minimum 50% ownership interest in juridical person (all)

Or

(bb) Natural person alone + together with related parties directly + indirectly controlling juridical person (all).

(c) Meaning of 2 or more than 2 juridical persons

(ca) 1 juridical person alone + together with related parties directly + indirectly owning minimum 50% ownership interest in other juridical person

Or

(cb) 1 juridical person alone + together with related parties directly + indirectly controlling other juridical person

Or

(cc) Any person alone + together with related parties directly + indirectly owning minimum 50% ownership interest or controlling 2 or more than 2 juridical persons.

(d) Person + its PE in UAE + foreign PE (all).

(e) 2 or more than 2 persons already partners in same unincorporated partnerships.

(f) Person who already trustee + founder + settler + beneficiary of trust + foundation + also related parties (all).

(ii) Meaning of control

• To include ability of person through own right + agreement + otherwise influence another person like:

(a) When ability to exercise minimum 50% voting rights of another Person.

+ (plus)

(b) When ability to determine composition minimum 50% of board of directors of another person.

+ (plus)

(c) When ability to receive minimum 50% profits of another Person.

+ (plus)

(d) When ability to determine + to exercise significant influence for conducting of business + affairs of another person (all).

117. UAE’s Payments to Connected Persons (Article 36)

(i) Payments to connected persons be deductible for computing taxable incomes when payments + benefits (both) made by taxable persons to its connected persons at market values of services + benefits + otherwise for wholly (100%) + exclusively uses for taxable person’s business

(ii) Meaning for connected person under Federal Decree-Law No. 47 of 2022

(a) To include owner of taxable person.

(b) To include director + officer (both) of taxable person.

(c) To include related parties of any person abovementioned under Article 36 (2)(a) + (b) of Federal Decree-Law No. 47 of 2022.

(iii) Meaning of owner of taxable persons under Federal Decree-Law No. 47 of 2022

• To include any natural person who directly + indirectly (both) owning ownership interest in taxable persons or controlling taxable persons specified under Article 36(2)(a) of Federal Decree-Law No. 47 of 2022

(iv) Meaning of taxable persons under Federal Decree-Law No. 47 of 2022

• To include partner in unincorporated partnerships + connected person is other (2^nd) partner in same unincorporated partnerships + also any other related party of same partner (all)

(v) Meaning of market values of service provided by connected person in exchange

• To include relevant provisions specified under Article 34 of Federal Decree-Law No. 47 of 2022 to determine payments made + benefits provided by taxable persons at market values of service + otherwise provided by connected person in exchange (all).

(vi) Payments to connected persons under Article 34(1) not disallowable in certain cases

(a) When taxable person’s shares traded at recognized Stock Exchange in UAE.

+ (plus)

(b) When taxable persons already under regulatory oversight of competent authority in UAE.

+ (plus)

(c) When any other person may be determined in decision to be issued by cabinet on suggestion of Minister in UAE.

(N) UAE’s Tax Losses’ Provisions for application of CT (Chapter-XI)

118. UAE’s Tax Losses’ Reliefs (TLR) (Article 37)

(i) Tax losses against business permitted to be set-off against taxable incomes of subsequent tax periods for computing taxable incomes for same subsequent tax periods.

(ii) Maximum limit for amount of tax losses to be set-off in subsequent 1 tax period

• Taxable persons permitted to set-off maximum 75% of tax losses amount in subsequent 1 tax period or any other % may be specified in decisions to be issued by cabinet on suggestion of Minister in UAE.

(iii) Taxable Persons not permitted to set-off against tax losses in certain cases like:

(a) When tax losses incurred before date of commencement of CT in UAE.

(b) When tax losses incurred before person becomes taxable persons in UAE.

(c) When tax losses incurred from assets + activities (both) covered for exempt incomes or not permitted under Federal Decree-Law No. 47 of 2022, if any.

(iv) Provisions for set-off against tax losses in subsequent + further subsequent tax period

(a) Taxable persons permitted to set-off of tax losses against taxable incomes in 1^st subsequent year + 2^nd subsequent year up to 10 tax period.

+ (plus)

(b) Also taxable persons permitted to set-off balance tax loss in 2^nd subsequent year up to 10 tax periods + also permitted to set-off any tax loss already transferred specified under Article 38 of Federal Decree-Law No. 47 of 2022.

119. UAE’s Transfer of Tax Losses’ (Article 38)

(i) Wholly (100%) tax losses + also partly (not 100%) tax losses permitted to set-off against taxable incomes of another taxable persons subject to satisfaction of certain conditions like:

(a) When both taxable persons be juridical persons in UAE.

+ (plus)

(b) When both taxable persons be resident persons in UAE.

+ (plus)

(c) When 1^st taxable persons having direct + indirect (both) ownership interest for minimum 75% in 2^nd taxable persons + also 3^rd taxable persons having ownership interest for minimum 75% in 1^st + 2^nd (both) taxable persons

+ (plus)

(d) Common ownership be existed from beginning to ending of tax period (both)

• Common ownership specified under Article 38(1) (c) be existed from beginning of tax period to ending of tax period (both) when tax loss incurred at end of tax period in which 2^nd taxable persons to off-set tax losses transferred by 1^st taxable person.

+ (plus)

(e) When 1^st + 2^nd (both) not to be exempt

+ (plus)

(f) When both persons not to be QFZP.

+ (plus)

(g)When financial year of both taxable persons be ended on same date.

+ (plus)

(h) When both taxable persons preparing financial statements under same accounting standards.

(ii) Impact of transfer of tax loss from 1^st taxable person to 2^nd taxable person

(a) Transferor taxable persons required to reduce his taxable incomes of same tax period

+ (plus)

(b) Also transferor not permitted to off-set total tax losses exceeding amount already allowed under Article 37(2) of Federal Decree-Law No. 47 of 2022.

+ (plus)

(c) Also transferor required to reduce available (balance) tax losses equivalent to tax losses to be transferred to transferee for same tax period.

120. UAE’s Limitation on Tax Losses for Carried Forward (Article 39)

(i) Taxable persons permitted to carry forward + to utilize (both) specified under Article 37(2) of Federal Decree-Law No. 47 of 2022 subject to satisfaction of certain conditions like:

(a) When same person(s) continuously owning for minimum 50% ownership interest in off-setting taxable persons from beginning of tax period in which tax loss incurred up to ending of tax period when wholly (100%) + partly (not 100%) tax losses off-set against taxable incomes .

+ (plus)

(b) Also taxable persons required to conduct same + also similar business + business activities after change in ownership exceeding 50%

(ii) Relevant factors for determining that taxable persons continued same business like:

(a) When taxable persons using wholly (100%) + partly (not 100%) same assets used before change in ownership.

+ (plus)

(b) When taxable persons not made significant changes in core identity + operations of business after change in ownership

+ (plus)

(c) When taxable persons made significant changes before change in ownership like development + exploitation of assets + services + processes + products + methods (all).

(iii) Provisions specified under Article 39(1) not applicable when shares already listed on recognized stock exchange.

(O) UAE’s Tax Groups Provisions for application of CT (Chapter-XII)

121. UAE’s Tax Groups (TG) (Article 40)

(i) Formation of Tax Groups by resident persons in UAE + also approval from authority UAE’s resident persons which known UAE’s parent company permitted to make application to FTA to form Tax Groups with 1 + more than 1 resident persons which to be treated subsidiary under Chapter XII of Federal Decree-Law No. 47 of 2022 subject to satisfaction of certain conditions like:

(a) That 100% resident persons be juridical persons.

+ (plus)

(b)  That parent company be owned for minimum 95% share capital in subsidiary directly + indirectly (both) through 1 + more than 1 subsidiaries (all).

+ (plus)

(c) That parent company be owned for minimum 95% voting rights in subsidiary directly + indirectly through 1 + more than 1 subsidiaries (all).

+ (plus)

(d) That parent company be entitled for minimum 95% profits + net assets (both) in subsidiary directly + indirectly through 1 + more than 1 subsidiaries (all).

+ (plus)

(e) That parent company + also 100% subsidiaries (both) should not to be treated Exempt Persons in UAE.

+ (plus)

(f) That parent company + also 100% subsidiaries (both) should not to be treated QFZP in UAE

+ (plus)

(e) That parent Company + also 100% subsidiaries (both) should not have different financial year in UAE.

+ (plus)

(h)  That parent Company + also 100% subsidiaries (both) should prepare their financial statements through same accounting standards.

(ii)  1 + more than 1 subsidiaries permitted to form Tax Groups subject to satisfaction of conditions to be prescribed by FTA in which govt. entity directly + indirectly (both) owned for minimum 95% ownership interest specified under Article 40(1) (b) + (c)+ (d) of Federal Decree-Law No. 47 of 2022.

(iii) Filling of application for allowing Tax Groups by parent company + by subsidiaries

• Application for allowing Tax Groups under Article 40(1) be made to FTA by parent company + also by 100% subsidiaries (both) to become member of Tax Groups

(iv) Impact on taxable person’s status after approval for Tax Groups by tax authority

• Parent company + 100% subsidiaries (both) be treated single taxable persons after approval for Tax Groups from FTA + also represented by parent company (all) under Article 40(1) of Federal Decree-Law No. 47 of 2022.

(v)  Parent company (only) required to comply 100% obligations specified under Chapters XIV + XVI + XVII (all) of Federal Decree-Law No. 47 of 2022.

(vi) Parent company + 100% subsidiaries (both) be jointly + also severally liable for CT payable by Tax Groups for tax period till they continue members of tax group.

(vii) Joint + several (both) liabilities under Article 40(6) permitted to be restricted for 1 or more than 1 tax periods for tax liability on 1 more than 1 members of Tax Groups (only) after approval from FTA in UAE.

(viii) Parent company + 100% subsidiaries (both) responsible for complying provisions specified under Article 45 of Federal Decree-Law No. 47 of 2022

(ix) More subsidiaries permitted to join existing Tax Groups after obtaining approval from FTA in UAE through submission of application by parent company + by more subsidiaries (both).

(x) Rights for subsidiary to leave Tax Groups in certain circumstances in UAE like:

(a)  When approval obtained for leaving Tax Groups from FTA through application already submitted by parent company + also by relevant subsidiary (both).

+ (plus)

(b) When relevant subsidiary not satisfying conditions specified under Article 40(1) for becoming member of Tax Groups in UAE.

(xi) Cessation of Tax Groups in certain circumstances in UAE like:

(a) When approval obtained for cessation from FTA by parent company through submission of application for cessation in UAE.

+ (plus)

(b) When parent company not satisfying conditions prescribed to form Tax Groups specified under Article 40(1) subject to provisions under Article 40(12) of Federal Decree-Law No. 47 of 2022.

(xii) Replacement from 1^st Tax Groups to 2^nd Tax Groups in certain circumstances in UAE like:

• Parent company of 1^st Tax Groups permitted to make application to FTA to replace with 2^nd Tax Groups of another parent company without discontinuation of 1^st Tax Groups in certain circumstances like.

 (a) When 2^nd parent company satisfying conditions prescribed under Article 40(1) for 1^st parent company.

+ (plus)

(b) When 1^st parent company already ceased to exist + also 2^nd parent company (both) or subsidiary company become universal legal successor.

(xiii) Tax authority’s powers for dissolving + changing (both) for Tax Groups in UAE

• FTA permitted to dissolve Tax Groups+ to change parent company of Tax Groups based on information’s available + also to notify for action taken (all).

122. UAE’s Date of Formation and Cessation of a Tax Groups (Article 41)

(i) Joining of Tax Groups in UAE

(a)  New Tax Groups may be formed + new subsidiary may be joined (both) existing Tax Groups from beginning of tax period specified in application submitted to FTA in UAE.

+ (plus)

(b) Also permitted from beginning of other tax period which may be determined by FTA under Article 40 of Federal Decree-Law No. 47 of 2022.

 (ii) Leaving of Tax Groups in UAE

(a)  Member of Tax Groups be treated leaving Tax Groups from beginning of tax period specified in application submitted to FTA when specified conditions not satisfied under Article 40(1) of Federal Decree-Law No. 47 of 2022.

+ (plus)

(b)  Also be permitted leaving Tax Groups from beginning of other tax period may be determined by FTA in UAE under Article 40 (10)(a) + 40(11)(a) (both) of Federal Decree-Law No. 47 of 2022.

123. UAE’s Taxable Income of a Tax Groups (Article 42)

(i) (a) Parent company required to consolidate financial results + assets + liabilities + etc. for 100% subsidiaries (all) for relevant tax period

+ (plus)

 (b) Also to eliminate transactions made between parent company and members of 100% subsidiaries of tax group

(ii) 100% relevant provisions of Federal Decree-Law No. 47 of 2022 be applied to Tax Groups in UAE.

(iii) Unutilized tax losses of 100% subsidiaries members of Tax Groups be carried forward with Tax Groups + also be used for off-setting taxable incomes of Tax Groups (both) when incomes attributable to relevant subsidiary.

(iv) Unutilized tax losses of existing Tax Groups can’t be used for off-setting taxable incomes of Tax Groups when incomes attributable to new subsidiary.

(v) Application of provisions prescribed under Article 42(3)+ 42(4) be subject to conditions prescribed under Article 37 + 39 (both) of Federal Decree-Law No. 47.

(vi) Tax losses of Tax Groups be remained with Tax Groups with exception that unutilized pre-group tax losses of relevant subsidiary when same subsidiary leaving tax group.

(vii) Provisions for allocation of unutilized tax losses of Tax Groups on cessation in UAE like:

(a) That 100% losses of Tax Groups be remained with parent company when parent company continue to be taxable persons in UAE.

+ (plus)

(b) That 100% tax losses of Tax Groups not available for off-setting against future‘s taxable incomes of each individual subsidiary with exception for unutilized pre-grouping tax losses.

(viii) Provisions under Article 42(7)(b) not applicable when Tax Groups continued because application of provisions prescribed under Article 40(12) of Federal Decree-Law No. 47 of 2022.

(ix) Provisions prescribed under Article 42(1) not applicable when assets + liabilities (both) transferred between members of Tax Groups + also transferor or transferee leaves Tax Groups in 2 year from date of transfer beside associate incomes already exempt from CT or not taken into account under any other provisions of Federal Decree-Law No. 47 of 2022.

(x) Corresponding adjustment needed in cost base against CT for relevant assets + liabilities when any income not taken into account for transfer prescribed in Article 42(9) be taken into account on date when transferor or transferee leaves from Tax Groups in UAE.

(xi) Tax Groups required to prepare consolidated financial statements through applicable accounting standards in UAE.

(P) UAE’s Calculation of Corporate Tax Payable for application of CT (Chapter-XIII)

124. UAE’s Currency (Article 43)

•  100% amounts be quantified in UAE’s dirham + also any amount quantified in other currency be converted at applicable exchange rate set by Central Bank of UAE after satisfaction of 100% conditions may be prescribed in decision issued by FTA in UAE.

125. UAE’s Calculation and Settlement of Corporate Tax (Article 44)

• CT settled in certain order under Federal Decree-Law No. 47 of 2022 like:

(i) 1^st through using taxable person’s available Withholding Tax Credit (WTC like TDS in India) determined under Article 46 of Federal Decree-Law No. 47 of 2022.

+ (plus)

(ii) 2^nd through using taxable person’s available Foreign Tax Credits (FTC) determined under Article 47 of Federal Decree-Law No. 47 of 2022

+ (plus)

(iii) 3^rd through using taxable persons’ available other credits + reliefs + etc. (all) specified in decision may be issued on suggestion of Minister in UAE.

(iv) 4^th through using taxable person’s payments made for CT under Article 48 of Federal Decree-Law No. 47 of 2022.

126. UAE’s Withholding Tax (WT) (Article 45)

(i) Certain incomes be subject to 0% WTC + also other rate specified in decision to be issued by Cabinet on suggestion of Minister in UAE:

 (a) 0% WTC on certain categories of incomes derived by UAE’s Non-Resident Persons from UAE’s sourced incomes prescribed in decision to be issued by Cabinet + also incomes not attributable to PE of Non-Resident Persons located in UAE (both).

+ (plus)

(b) Also 0% WTC on other incomes specified in decision to be issued by Cabinet on suggestion of Minister in UAE.

(ii) WTC payable under Article 45(1) be deducted from gross amount of payment +  be remitted to FTA in form + in manner + also within timeline (all) prescribed by FTA in UAE.

127. UAE’s Withholding Tax Credit (WTC) (Article 46)

(i) CT payable by taxable persons under Article 3 of Federal Decree-Law No. 47 of 2022 be reduced by amount of WTC available for relevant tax period

(ii)   Maximum permissible WTC under Federal Decree-Law No. 47 of 2022:

(a)  Amount available for WTC under Article 45(2) of Federal Decree-Law No. 47 of 2022.

Or

(b)  CT payable (due) under Federal Decree-Law No. 47 of 2022 whichever lower.

 (iii) Refund against excess WTC for relevant tax period under Article 49(2)

• Excess WTC for relevant tax period be refunded to taxable persons Article 49(2) of Federal Decree-Law No. 47 of 2022.

 128. UAE’s Foreign Tax Credits (FTC) (Article 47)

(i) CT due under Article 3 be reduced by amount of FTC for relevant tax period in UAE.

(ii) FTC not permitted for refund when exceeding amount of CT due on relevant incomes in UAE similar provisions applicable in India.

(iii)  100% unutilized FTC under Article 47(2) can’t be carried forward + carried back (both) in UAE similar provisions applicable in India.

(iv) UAE’s taxable persons required to maintain 100% necessary records for claiming FTC in UAE.

(Q) UAE’s Payment + Refund of Corporate Tax for application of CT (Chapter-XIV)

129. UAE’s Corporate Tax Payment (CTP) (Article 48)

• UAE’s taxable persons required to settle CT due in 9 month from end of relevant tax period + also other date determined by FTA in UAE.

130. UAE’s Corporate Tax Refund (CTR) (Article 49)

(i) UAE’s taxable persons permitted to make application to FTA for refund  against CT under provisions of TPL in UAE in certain circumstances like:

(a) When available WTC exceeding CT due in UAE.

+ (plus)

(b) Also when FTA otherwise satisfied that taxable persons paid CT in excess of CT due in UAE.

(ii) FTA required to issue notice to taxable persons for authority’s decision on application made under Article 49(1) under applicable TPL in UAE.

(R) UAE’s Anti-Abuse Rules for application of CT (Chapter-XV) 

131. UAE’s General Anti-Abuse Rules (GAAR) (Article 50)

(i) GAAR applicable on transactions + arrangements (both) having certain circumstances like:

(a) When wholly (100%) + partly (not 100%) transaction + arrangement entered for not valid commercial purpose + also for not other fiscal reasons (all).

(b) When wholly (100%) + partly (not 100%) main purpose of transaction + arrangement to obtain CT advantage + also not consistent with intention or purpose of Federal Decree-Law No. 47 of 2022 (all).

(ii) Meaning of CT advantage:

(a) To include claimed fake refund + increased fake refund of CT (both).

(b) To include avoidance + reduction of CT Payable (both).

(c) To include deferral payment of CT + advancement of refund of CT (both).

(c) To include avoidance of obligation to deduct + to account for CT (both).

(d) Powers of tax authority for application of GAAR provisions in UAE

• FTA permitted to determine specific CT advantages obtained through transactions + arrangements + also to recover from taxable persons (all).

(iv) Duties of FTA for application of GAAR provisions in UAE

• FTA required to issue assessment for giving effect after determination that CT advantages obtained through transactions + arrangements (both) by taxable persons like:

(a) Already allowed exemptions + deductions + reliefs in calculating taxable incomes + CT payable (all)

+ (plus)

(b) Already allocated exemptions + deductions + reliefs (all) to other person

+ (plus)

(c) Already re-characterized purposes of Federal Decree-Law No. 47 of 2022 + nature of any payment + also nature of other amount (all)

+ (plus)

(d) Already disregarded effect of provisions of Federal Decree-Law No. 47 of 2022 + also compensated adjustments to CT liability of any other person (both).

(v) Criteria’s for determination that transactions + arrangements (both) executed like:

(a) Manner used for transactions + arrangements entered + formed + also substance (all)

+ (plus)

(b) Timing of transactions + arrangements (both).

+ (plus)

(c) Result of transactions + arrangements (both) for application of Federal Decree-Law No. 47 of 2022.

+ (plus)

(d) 100% changes in financial position of taxable persons from transactions + arrangements (both).

+ (plus)

(e) 100% rights + obligations (both) created through transactions + arrangement which normally not possible using ALS

+ (plus)

(f) Any other information’s + circumstances (both).

(vi) FTA required to demonstrate that determination reasonable before commencing of proceeding for application of GAAR provisions in UAE.

(S) UAE’s Tax Registrations + Deregistration for application of CT (Chapter-XVI) 

132. UAE’s Tax Registrations (TR) (Article 51) 

(i) 100% taxable persons required to register for CT with FTA in  form + in manner + in timeline (all) prescribed to obtain Tax Registration Number (TRN) except in special circumstances may be prescribed by Minister in UAE.

(ii) Powers of tax authority for providing exemptions against obtaining TRN in UAE

• FTA permitted to prescribe to obtain TRN by exempted taxable persons from CT like prescribed under Article 53(6) + Article 4(1) (e) to (i) + unincorporated partnerships (all).

(iii)  Federal ax authority permitted to use discretion + also based on information’s available (both) to register any person for CT effective from date for becoming taxable persons in UAE.

133. UAE’s Tax Deregistration (TD) (Article 52)

(i) Taxable persons having TRN permitted to file tax deregistration application with FTA when cessation of business + business activities through dissolution + liquidation + otherwise + in form + in manner + in timeline (all) prescribed in UAE.

(ii) Taxable persons not permitted for tax deregistration till 100% CT paid + penalties paid + filed 100% tax returns pending under Federal Decree-Law No. 47 of 2022 + also tax return be filed up to date of cessation (all).

(iii) Federal Tax authority required to de-register to taxable persons for CT from date of cessation or from other date may be determined after approval of deregistration.

(iv) Authority’s powers when taxable persons not complying deregistration requirements

• FTA permitted with own discretion + also based on information’s available (both) to deregister taxable persons from certain dates like:

(a) From last date of tax period when taxable persons not satisfying conditions prescribed under Article 52 (2) of Federal Decree-Law No. 47 of 2022.

+ (plus)

(b) Also from date when taxable persons ceases to exist.

(T) UAE’s Tax Returns + Clarifications for application of CT (Chapter-XVII) 

134. UAE’s Tax Returns (TR) (Article 53)

(i) UAE’s taxable persons required to file tax return to FTA in prescribed form + in manner in maximum in 9 month from end of relevant tax period + also other date directed by FTA (all).

(ii) Minimum information’s be included in tax return to be filed by taxable persons in UAE

 (a) Tax period for tax return to be filed.

+ (plus)

(b) Also name + address + TRN of taxable persons + date of submission of tax return (all).

+ (plus)

 (c) Also nature of accounting used in preparation of financial statements.

+ (plus)

(d) Also taxable incomes for tax period.

+ (plus)

(e) Also amount of tax reliefs claimed against tax losses under Article 37(1) of Federal Decree-Law No. 47 of 2022.

+ (plus)

(f) Also amount of tax losses transferred under Article 38 of Federal Decree-Law No. 47 of 2022.

+ (plus)

(g) Also amount of tax credits claimed under Articles 46 + 47 (both) of Federal Decree-Law No. 47 of 2022.

+ (plus)

(h) Also amount of CT payable for tax period.

(iii) Duties of taxable person

• Taxable persons required to provide to FTA 100% reasonable information’s + documents + records (all) for implementing provisions of Federal Decree-Law No. 47 of 2022

(iv) Powers of Minister

• Minister permitted to prescribe form + manner for filling tax return + other information’s to be filed to FTA by taxable persons when disclosure of information’s required for national security + also in public interest (all).

(v) Powers of FTA for making request to any person

• FTA permitted to make request to any person specified under Article 4 (1) (e) to (i) of Federal Decree-Law No. 47 of 2022 to submit declaration.

(vi) Tax authority’s powers for issuing notice + decision (both) to authorize partner

• FTA permitted for issuing notice + decision (both) to authorize partner in unincorporated partnerships for filling declaration on behalf of partner when application not approved under Article 16(8) of Federal Decree-Law No. 47 of 2022.

(vii) Duties of parent company

• Parent company required to file tax return to tax authority on behalf of tax group.

135. UAE’s Financial Statements (Article 54)

(i) Powers of tax authority for issuing notices + decisions submit financial statements

•  FTA permitted for issuing notices + decisions submit financial statements already used for computing tax period’s taxable incomes in prescribed form + manner + within time (all)

(ii) Powers of Minister for issuing decision for audit + certified financial statements

• Minister permitted for issuing decision to specific categories of taxable persons for preparing + maintaining audited + certified financial statements (all).

(iii) Tax authority’s powers for issuing request to partner to provide financial statements

• FTA permitted for issuing request to partner in unincorporated partnerships to provide financial statements showing 100% certain information’s:

(a)  100% assets + liabilities + incomes + expenditures (all) for    unincorporated partnerships.

(b) 100% partner’s distributive shares in unincorporated partnership’s assets + liabilities + incomes + expenditures (all).

136. UAE’s Transfer Pricing (TP) Documentations (Article 55)

(i) Tax authority’s powers for issuing notice + decision to file information’s for TP

• FTA permitted for issuing notice + decision to taxable persons for filling disclosure with tax return containing certain information’s against taxable person’s transactions + arrangements with related parties + also connected persons in prescribed form + in manner (all).

(ii) Minister powers for prescribing conditions for maintaining master file + local file

• Minister permitted for prescribing conditions for maintaining master file + local file in prescribed form against taxable person’s transactions + arrangements with its related parties + connected persons for tax period (all).

(iii) Timeline for submission of documents to FTA by taxable persons

• Timeline for submission of documents specified under Article 55(2) to FTA by taxable persons in 30 day from date of request

(iv) Duties of taxable persons for providing information’s to support ALS

• Taxable persons required to provide FTA 100% information’s requested to support ALS of taxable person’s transactions + arrangements with its related parties + connected persons in 30 day from date of request in prescribed form + in manner (all)

 137. UAE’s Record Keeping (RE) (Article 56)

(i) Duties of taxable persons for maintaining records + documents (both) for 7 year

• Taxable persons required for maintaining 100% records + also documents (both) for 7 year from end of related tax period like:

(a) 100% supports against information’s to be filed in tax return + also other documents to be filed with FTA (both).

+ (plus)

(b)  Also for ascertaining taxable person’s taxable incomes by tax authority.

(ii) Duties of Exempt Persons for maintaining 100% records + also documents (both)

• Exempt Persons required to maintain 100% records + also documents for determining exempt person’s status by FTA for minimum 7 year from end of related tax.

138. UAE’s Tax Period (TP) (Article 57)

(i) Meaning for tax period in UAE

• To include financial year for taxable person’s tax period to file tax return with FTA.

(ii) Meaning for financial year in UAE

• To include Gregorian calendar year + also any 12 month’s period for which taxable persons preparing financial statements

139. UAE’s Change of Tax Period (Article 58)

• Meaning for change of tax period in UAE

To include application to be filed by taxable persons with FTA to change start date + end date for its tax period + also for to use different tax period after satisfying conditions prescribed by FTA (all).

140. UAE’s Clarifications (Article 59)

(i)  Meaning for clarifications in UAE

• To include application by taxable persons to FTA for clarifications + also for conclusion against Advance Pricing Agreement (APA) for 100% transactions + arrangements proposed + also already entered (all).

(ii) Meaning for application in UAE

To include prescribed form + manner (both) for filling application under Article 59(1) to FTA.

(U) UAE’s Violations + Penalties for application of CT (Chapter-XVIII)

141. UAE’s Assessment of Corporate Tax + also penalties (Article 60)

(i) Taxable person’s taxable incomes may be subject to CT assessment under TPL + also decisions issued for implementing of its provisions.

(ii) Powers of tax authority for prescribing circumstances + also conditions (both)

• FTA permitted for prescribing circumstances + also conditions (both) under UAE’s tax procedure laws + also decisions issued for implementing of its provisions for CT assessment.

(iii) Tax penalties + also fine (both) be based on Tax Law Procedure (TLP) + preambles + decisions issued for implementing of its provisions under Federal Decree-Law No. 47 of 2022.

(V) UAE’s Transitional Rules for application of CT (Chapter-XIX)

142. UAE’s Transitional Rules (TR) (Article 61)

(i) Taxable person’s opening balance sheet for CT be closing balance sheet prepared for financial reporting under applicable accounting standards in UAE on last day of Financial Year ending immediately before 1^st tax period commenced after satisfying conditions + adjustments may be prescribed by Minister (both).

(ii) Taxable persons’ opening balance sheet referred under Article 61(1) be prepared based on ALS specified under Article 34 of Federal Decree-Law No. 47 of 2022.

(iii) Article 61(1) + 61(2) + exception to provisions provided under Article 70 + also provisions provided under Article 50 (all) be applied for transactions + arrangements entered on or after date of publication in Official Gazette of Federal Decree-Law No. 47 of 2022.

(W) UAE’s Closing Provisions for application of CT (Chapter-XX)

143. UAE’s Delegation of Powers (Article 62)

• Minister permitted to delegate his whole (100%) + also part (not 100%) powers available under Federal Decree-Law No. 47 of 2022.

144. UAE’s Administrative Policies and Procedures (APP) (Article 63)

• Tax authorities in co-ordination with ministry permitted for issuing administrative policies + procedures + general instructions (all) for requirements to be imposed on taxable persons under Federal Decree-Law No. 47 of 2022.

145. UAE’s Cooperating with Authority (Article 64)

• 100% governmental authorities in UAE required full co-operation with FTA to carry for implementing provisions of Federal Decree-Law No. 47 of 2022 + also to provide 100% data’s + information’s + documentations against taxable persons + also Exempt Persons (all).

146. UAE’s Revenue Sharing (RS) (Article 65)

Revenue sharing permitted between Federal government and local government (both) against CT revenues + also administrative penalties (both) collected based on provisions of Federal Decree-Law No. 47 of 2022.

147. UAE’s International Agreements (IA) (Article 66)

• International agreement’s provisions will override on provisions of Federal Decree-Law No. 47 of 2022 when both provisions inconsistent.

148. UAE’s Implementing Decisions (ID) (Article 67)

(i) Minister + FTA (both) permitted for issuing necessary decision for implementing provisions of Federal Decree-Law No. 47 of 2022.

(ii) Cabinet permitted for issuing implementing decisions on suggestion of minister for Federal Decree-Law No. 47 of 2022.

149. UAE’s Cancellation of Conflicting Provisions (Article 68)

• Minister permitted to cancel contradictory + inconsistent (both) provisions of Federal Decree-Law No. 47 of 2022.

150. UAE’s Application of this Decree-Law to Tax Periods (Article 69)

• Federal Decree-Law No. 47 of 2022 applicable from tax period commencing on or after June 01, 2023 in UAE.

151. UAE’s Publication + also Application of Federal Decree Law No. 47 (Article 70)

Federal Decree-Law No. 47 of 2022 be published in Official Gazette + also be effected after 15 day from date of publication.

Conclusion: UAE’s new Corporate Tax legislation brings significant changes to the taxation landscape. This guide, consisting of 151 FAQs, serves as a valuable resource for businesses, individuals, and professionals seeking clarity on various aspects of the CT laws. By exploring the comprehensive answers provided, stakeholders can navigate the complex regulatory environment and make informed decisions in compliance with UAE’s Corporate Tax laws.

Note: The guide is based on the information provided in Federal Decree Laws No. 47 of 2002.

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(Author can be reached at email address satishagarwal307@yahoo.com or on Mobile No. 9811081957)

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