Page 24 - Premier Brains Global -Doing Business in UAE (Low Res)

DOING BUSINESS in UAE

A withholding tax (WHT) currently is 0% Corporate Taxpayers shall prepare
There are elaborate provisions included ``financial statements in accordance with the
in the corporate tax covering topics of tax International Financial Reporting Standards
grouping, transfer of group losses, small in the UAE. Cash basis of accounting is
business relief, permanent establishment, permitted, in the case where revenues do
place of effective management, qualifying not exceed AED 3 million OR in an exceptional
freezone person etc. circumstance and provided an application
submitted to the Federal Tax Authority.
The concept of transfer pricing for
transactions with related parties is at the
heart of the corporate tax law. Though the
requirement for preparation of local file
& master file is set at turnover of AED 200
million on standalone basis or MNEs with
consolidated revenue above AED 3.15 billion,
however arms length pricing is expected
for all related party transactions. Definition
of related parties is covered through the
concept of “Connected Person” which also
covers key management thus there is a
need to carefully assess all the connected
persons and it might not exactly match
with the definition of related parties under
international financial reporting standards.

Non residents can become tax residents
in UAE due to permanent establishment or
from deriving income sourced from UAE,
however they are expected to pay tax on
such income only.

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