Answer:
A foreign juridical person will be treated as a Resident Person under UAE corporate tax law if it is effectively managed and controlled in the UAE (Federal Decree-Law No. 47 of 2022, Article 11). This means the company may be subject to UAE corporate tax on both domestic and foreign-source income, unless a specific exemption applies.
Key Criteria (Article 11(3)(b)):
- The company is incorporated or established under foreign law; and
- It is effectively managed and controlled in the UAE (e.g., where strategic decisions are made).
Implications:
- The company becomes a Resident Person and a Taxable Person under UAE law.
- It must account for UAE CT on its global income, unless exemptions such as the Foreign Permanent Establishment Exemption under Article 24 apply.
See also: List of UAE Double Taxation Avoidance Agreements (DTAAs).
Example:
If a foreign company holds board meetings and makes key management decisions from Dubai, it may be considered effectively managed and controlled in the UAE and thus treated as a UAE tax resident.