Determination of a Non-Resident Person’s Nexus in the State for the Purposes of Federal Decree-Law No. 47 of 2022 on the Taxation of Corporations and Businesses
Issued 30 May 2023 – (Effective from 1 June 2023)
The Cabinet has decided:
- Having reviewed the Constitution,
- Federal Law No. 1 of 1972 on the Competencies of Ministries and Powers of the Ministers, and its amendments,
- Federal Decree-Law No. 13 of 2016 on the Establishment of the Federal Tax Authority, and its amendments,
- Federal Decree-Law No. 28 of 2022 on Tax Procedures,
- Federal Decree-Law No. 47 of 2022 on the Taxation of Corporations and Businesses, and
- Pursuant to what was presented by the Minister of Finance and approved by the Cabinet.
Article 1 – Definitions
Definitions in Federal Decree-Law No. 47 of 2022 on the Taxation of Corporations and Businesses shall be applied to this Decision, with exception to that, the following expressions shall have the meaning assigned against each, unless the context requires otherwise:| Immovable Property | : | Means any of the following:
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| Corporate Tax Law | : | Federal Decree-Law No. 47 of 2022 on the Taxation of Corporations and Businesses. |
Article 2 – Nexus in the State
- For the purposes of paragraph (c) of Clause (4) of Article (11) of the Corporate Tax Law, any juridical person that is a Non-Resident Person shall have a nexus in the State if it earns income from any Immovable Property in the State.
- For the purposes of paragraph (c) of Clause (3) of Article (12) of the Corporate Tax Law, the Taxable Income that is attributable to the Immovable Property in the State shall include income derived from the right in rem, sale, disposal, assignment, direct use, letting, including subletting and any other form of exploitation of Immovable Property.
Article 3 – Artificial Transfer of Rights in Immovable Property
If a Non-Resident Person artificially transfers or otherwise disposes of its right in rem in any Immovable Property in the State to another person and that transfer or disposal is not for a valid commercial or other non-fiscal reason which reflects economic reality, this would be considered an arrangement to obtain a Corporate Tax advantage under Clause (1) of Article (50) of the Corporate Tax Law.Article 4 – Requirement to Register for Corporate Tax
A Non-Resident Person that has a nexus in the State in accordance with Article (2) of this Decision shall be required to register with the Authority in accordance with Article (51) of the Corporate Tax Law.Article 5 – Implementing Decisions
The Minister shall issue the necessary decisions to implement any of the provisions of this Decision.Article 6 – Publication and Application of this Decisions
This Decision shall be published in the Official Gazette and shall come into effect on 1 June 2023.Important Notice
The above extract has been provided for reference only and is based on information available in the public domain at the time of publication, which is subject to change. This does not constitute any form of advice or recommendation and therefore cannot be relied on to cover specific situations. We highly recommend that you consult with a qualified tax advisor in the UAE for personalized guidance based on your specific business circumstances. We accept no duty of care or liability for any loss occasioned to any person acting or refraining from action as a result of any material in this publication. Please refer to the following resources for the official and up-to-date information on the UAE Corporate Tax legal framework:- UAE Ministry of Finance: https://mof.gov.ae/tax-legislation/; and
- UAE Federal Tax Authority: https://tax.gov.ae/en/Legislation.aspx