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Withholding tax

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

What is the UAE withholding tax rate?

0% on a non-resident's UAE-sourced income that is not attributable to a UAE PE or nexus, unless the Cabinet sets another rate.

Per Federal Decree-Law No. 47 of 2022 and its amendments, Article 45, Withholding Tax (as replaced by Federal Decree-Law No. 40 of 2024)

The State Sourced Income of a Non-Resident Person is subject to tax at a rate of 0% in the form of Withholding Tax, or any other rate the Cabinet decides, to the extent that income is not attributable to a Permanent Establishment or a nexus of the Non-Resident Person in the State. The Cabinet may set other rates for particular categories of State Sourced Income, and may bring other income within Withholding Tax. The tax is deducted from the gross amount of the payment and remitted to the Authority in the form, manner and timeline the Authority prescribes.

A deduction-at-source obligation on the payer, not a liability assessed on the recipient. At the published rate of 0% nothing is deducted today; the rule exists so that the day the Cabinet sets another rate, the answer changes by a rateTable row rather than by a rewrite. The credit for any tax deducted is Article 46, first in the Article 44 settlement order.

What the article reaches, and what it does not

Article 45 was replaced by Federal Decree-Law No. 40 of 2024, effective from 1 June 2023 — so from the first Tax Period, the replaced text is the law.

45(1) — the charge

ALL State Sourced Income (Article 13) of a Non-Resident Person, at 0% or any other rate the Cabinet decides — to the extent it is not attributable to a Permanent Establishment (Article 12(3)(a)) or a nexus (Article 12(3)(c)) of the Non-Resident in the State. There is no longer a list of prescribed categories to be on.

The carve-outs

  • Income attributable to a Permanent Establishment in the State is taxed on that Permanent Establishment's own account (Articles 12 and 14)
  • Income attributable to a nexus in the State — income from UAE Immovable Property under Cabinet Decision No. 56 of 2023 — is taxed on that nexus's own account
  • "To the extent": a payment only partly attributable is split, and each part run separately

45(2) and 45(3) — the Cabinet's powers

  • 45(2): set different rates for particular categories of State Sourced Income
  • 45(3): bring any other income within Withholding Tax at rates it specifies
  • No decision under either is in force as at the date of this encoding; the watcher reports one if issued

45(1) — the rate

0%, stated in the article itself, or any other rate the Cabinet decides. A published nil is still a published rate: this rule resolves the value and reports it, so a computation at nil is distinguishable from a computation with nothing published.

45(4) — the mechanics

The tax is deducted from the GROSS amount of the payment and remitted to the Authority in the form and manner and within the timeline the Authority prescribes, subject to any controls or conditions it adds. None applies while the rate is nil.

Article 46 — the credit, and why it is on this page

A Taxable Person's Corporate Tax due is reduced by the Withholding Tax Credit, capped at the lower of the tax deducted and the Corporate Tax due, and any excess is refunded under Article 49 — the opposite of Article 47(3), which loses an excess Foreign Tax Credit. At a 0% rate the credit is always nil, so it is stated here rather than encoded as its own rule.

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

    Attributable to a Permanent Establishment in the State

    Tested first. Income attributable to a UAE Permanent Establishment of the Non-Resident is outside this article entirely and within the charge on that Permanent Establishment.

  3. 3

    Attributable to a nexus in the State

    Income attributable to a nexus of the Non-Resident in the State under Article 12(3)(c) is outside this article, and within the charge on that nexus.

  4. 4

    Income derived by a Non-Resident Person

    Article 45(1) applies to the State Sourced Income of a Non-Resident Person.

  5. 5

    State Sourced Income

    The income must be State Sourced Income under Article 13. Other income is outside Article 45(1), unless a Cabinet Decision under Article 45(3) reaches it.

  6. 6

    Withholding Tax on State Sourced Income of a Non-Resident Person

    The published rate applied to the gross amount, with the amount deducted and the net paid across both shown.

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.

A payment to a non-resident, no UAE establishment

A UAE company pays AED 1,000,000 of State Sourced Income — say, a fee for services used in the State — to a non-resident supplier with no Permanent Establishment or nexus here. It is within the charge, at 0%.

Computed

Withholding Tax of AED 0 as computed on the gross payment of AED 1,000,000: the published rate for FY2026 is 0%, and Article 45(4) has the tax deducted from the gross amount and remitted to the Authority in the form, manner and timeline the Authority prescribes, leaving AED 1,000,000 paid across. Based on the figures you supplied. Article 45(2) lets the Cabinet set a different rate for particular categories of State Sourced Income; none is encoded here. Whether the recipient can credit the tax is decided by Article 46.

Workings

Gross amount of the paymentArticle 45(4) — as supplied
AED 1,000,000
Withholding Tax rate appliedArticle 45(1) — published value for FY2026
0%
Withholding Tax to be deductedArticle 45(4) — deducted from the gross amount and remitted to the Authority
AED 0
Net amount paid to the recipientArticle 45(4)
AED 1,000,000

Decided by the withholding tax on state sourced income of a non-resident person

The same payment, attributable to a UAE branch

The same non-resident has a Permanent Establishment in the State and the income is attributable to it, so Article 45 does not reach the payment.

Computed

No Withholding Tax under Article 45 as computed: the article reaches State Sourced Income of a Non-Resident Person only to the extent it is not attributable to a Permanent Establishment of that Person in the State, and you have indicated this income is. It is within the charge on that Permanent Establishment instead, which Articles 12 and 14 decide.

Workings

Gross amount of the paymentArticle 45(4) — as supplied
AED 1,000,000
Withholding Tax to be deductednil — outside Article 45, being attributable to a Permanent Establishment in the State
AED 0
Net amount paid to the recipientnothing deducted
AED 1,000,000

Decided by the attributable to a permanent establishment in the state

Rent from UAE property paid to a non-resident

A tenant pays AED 450,000 of rent to a non-resident company that owns the building. The income is attributable to the landlord's nexus in the State, so it is taxed on the nexus rather than withheld.

Computed

No Withholding Tax under Article 45 as computed: the article reaches State Sourced Income of a Non-Resident Person only to the extent it is not attributable to a nexus of that Person in the State under Article 12(3)(c), and you have indicated this income is. It is within the charge on that nexus instead, which Cabinet Decision No. 56 of 2023 decides.

Workings

Gross amount of the paymentArticle 45(4) — as supplied
AED 450,000
Withholding Tax to be deductednil — outside Article 45, being attributable to a nexus in the State
AED 0
Net amount paid to the recipientnothing deducted
AED 450,000

Decided by the attributable to a nexus in the state

A payment to a Resident Person

The same kind of payment made to a UAE Resident Person, which Article 45(1) does not reach.

Computed

No Withholding Tax under Article 45(1) as computed: it applies to the State Sourced Income of a Non-Resident Person, and you have indicated the recipient is not one. Article 45(3) lets the Cabinet bring other income within Withholding Tax by decision; no such decision is encoded here.

Workings

Gross amount of the paymentArticle 45(4) — as supplied
AED 450,000
Withholding Tax to be deductednil — the recipient is not a Non-Resident Person
AED 0
Net amount paid to the recipientnothing deducted
AED 450,000

Decided by the income derived by a non-resident person

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

5 inputs still need your determination:

  • What is the gross amount of the payment?
  • Is the income derived by a Non-Resident Person?
  • Is the income State Sourced Income under Article 13?
  • Is the income attributable to a Permanent Establishment of the Non-Resident Person in the State? Where only part of it is, run the attributable and the unattributable parts separately.
  • Is the income attributable to a nexus of the Non-Resident Person in the State — income from Immovable Property in the State, under Cabinet Decision No. 56 of 2023?

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.

Thresholds

uae.withholding_tax_rate
0% · reviewed 2026-09-28 · source

Threshold values are published separately from the rule and carried with a citation. Where none has been published for the period being computed, the rule reports that rather than applying a default.

Sources

Share this rule

Reference, not tax advice.

Pankaj Agarwal — Tax Technology Leader