Browse all rules ↓

Nexus: non-resident juridical persons

Applies
FY2024 onwards
Reviewed
Rule
UAE-CT-NEXUS-2024.1
By

When does a foreign company have a UAE nexus?

When it earns income from immovable property in the UAE, by selling, using, letting or exploiting it. It is then taxable on that income.

Per Federal Decree-Law No. 47 of 2022, Article 12, Corporate Tax Base

A non-resident juridical person has a nexus in the UAE, and is a taxable person on the income attributable to it, where it derives income from immovable property in the UAE — the sale or disposal, direct use, letting, or other exploitation of that property.

The nexus brings the income attributable to the UAE immovable property into the Corporate Tax charge and requires registration. It is one of the connecting factors for a non-resident (see the non-resident basis-of-taxation rule); a Permanent Establishment is the other.

What creates a nexus

Income from immovable property in the UAE

A nexus arises where a non-resident juridical person derives income from immovable property situated in the UAE, including:

  • Sale, disposal or assignment of the property
  • Direct use of the property
  • Letting, sub-letting, or other exploitation of the property

Order of testing

  1. 1

    Inputs requiring your determination

    Any input a person must decide and has not decided stops the computation. An undecided input is never read as a no.

  2. 2

    Immovable property in the UAE

    The non-resident juridical person has a nexus where it derives income from immovable property in the UAE. A nexus turns on the presence of the income, not its amount.

Examples

Illustrative scenarios — ours, not the authority’s — each computed live by this rule. Change any fact and the outcome is the rule’s, not a hand-written answer.

Letting a UAE building

A foreign company lets an office building it owns in Dubai, with no other UAE connection.

Computed

Has a nexus in the UAE as computed: the non-resident juridical person derives income from immovable property in the UAE, based on the determination you supplied. The income attributable to that nexus is within the charge, and registration is required.

Decided by the immovable property in the uae

No UAE property income

A foreign company with no immovable property in the UAE and no income from any.

Computed

No nexus in the UAE as computed on this ground: the non-resident juridical person derives no income from immovable property in the UAE, based on the determination you supplied.

Decided by the immovable property in the uae

Try it

Supply the facts and this rule computes the outcome in your browser, live. Leave a determination undecided and it blocks the result — it is never read as a no.

Not computed yet

1 input still need your determination:

  • Does the non-resident juridical person earn income from Immovable Property in the UAE — a right in rem, sale, disposal, assignment, direct use, letting (including subletting) or any other exploitation (Cabinet Decision No. 56 of 2023, Article 2)?

Computed in your browser from the figures you supply. Nothing is sent anywhere, and the result is a computation against a rule — reference, not tax advice.

Sources

Share this rule

Reference, not tax advice.

Pankaj Agarwal — Tax Technology Leader