Taxation of UAE Companies and other Legal Person

Taxation of UAE companies depend on whether they are domestic companies or foreign companies. Besides companies, it also covers certain other form of legal person. Let us look at these in detail

Which all Legal persons are covered under UAE Corporate Tax ?

UAE CT will apply to the following categories of legal person : –

• UAE entities : –
  • UAE companies ; and
  • Other legal persons incorporated in the UAE. This shall include the following :-
    • Limited Liability Companies ;
    • Private Shareholding Companies ;
    • Public Joint Stock Companies ; and
    • Other entities  that have separate legal personality and are established under the UAE laws .
  • Limited liability partnerships, partnerships limited by shares and other types of partnerships,  where neither of the partner has unlimited liability for the partnership’s obligations , will be subject to UAE CT as a UAE company.

The rate of taxation of Companies based in UAE is 9% for income in excess of AED 375,000 unless the said income is exempt from Corporate tax (For exempt income refer our separate Article).

• Foreign legal entities : –
  • Foreign legal entities having a Permanent Establishment  in the UAE  ; or
  • Foreign legal entities which earn UAE sourced income ;
  • Foreign legal entities effectively managed and controlled in the UAE . Such companies would be treated as deemed resident of UAE .

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The taxation of each of such UAE companies is discussed in detail in our other blogs that can be referred to from the index page .

Taxation of Limited and general partnerships and other unincorporated joint ventures and associations of persons ?

Taxation of UAE Companies ( “Domestic entities”) : –  

Under the proposed law, Limited partnerships, General partnerships , other unincorporated joint ventures and Associations of persons , will be treated as ‘transparent’ entities, whereby, they shall  not be treated as taxpayers but their income will be taxed in the hands of their partners or members . For example, collective investment funds investors would be covered under these provisions.

UAE Corporate Tax on Foreign unincorporated partnerships  : –  

For UAE CT purpose, foreign unincorporated partnerships would generally follow the tax treatment of the partnership in the respective foreign jurisdiction.

For more details on taxation of UAE Companies, please refer UAE Corporate Tax Public Consultation Document.

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