Permanent Establishment (UAE Corporate Tax)

A permanent establishment is a taxable presence that a foreign person can create in the UAE, bringing the income attributable to that presence within UAE Corporate Tax even where the person is not a UAE resident. A non-resident person is generally taxed only on income from a UAE permanent establishment, income from UAE real estate, or other UAE-sourced income. Double taxation agreements typically narrow the definition of a permanent establishment, which can help a business avoid unintended tax exposure where it conducts only limited activities in a treaty partner country. Because whether activities give rise to a permanent establishment is a fact-intensive question, it is best analysed before operations begin rather than after a presence has formed.