UAE Cabinet Decision No. 56 of 2023 on Determination of a Non-Resident Person’s Nexus in UAE

The UAE Cabinet has issued Cabinet Decision No. 56 of 2023 on the Determination of Non-Resident Person’s Nexus in UAE for the purposes of the Federal Decree-Law No. 47 of 2022 on the Taxation of Corporations and Businesses.

The decision spells out the circumstances under which a Non-Resident legal entity is deemed to have Nexus in the UAE to bring them under the purview of Corporate Tax.

Accordingly, it specifies:

• A Non-Resident juridical person is deemed to have Nexus in the UAE if it earns income from any Immovable Property in the UAE and must register for Corporate Tax with the Federal Tax Authority.
• The Non-Resident juridical person will be taxed on the income earned from such Immovable Property.
• If the Non-Resident juridical person transfers the Rights in Immovable Property to another party without valid commercial reasons, it is considered as an arrangement to get a Corporate Tax Advantage and the provisions of the General Anti Abuse Rule (GAAR) will apply.

The decision further defines “Immovable Property” as the land where rights, interests, or services can be established, as well as buildings, structures, engineering works, fixtures, and equipment can attach permanently to the land or the seabed.