Ministry of Finance issues decision on non-resident permanent establishments

The Ministry of Finance (MoF) has issued Ministerial Decision No. 83 of 2023 concerning the circumstances in which the presence of natural persons in the UAE may/cannot establish a permanent establishment for non-residents (foreign companies), including if their presence is due to unforeseen temporary exceptional circumstances , and they have no intention of remaining in the UAE once these circumstances cease.

The decision further clarifies what constitutes a temporary and special presence in the UAE. It aims to provide clarity and prevent tax avoidance and double non-taxation in line with global best practice.

The Ministry issued another Ministerial Decision No. 82 of 2023 stipulating that taxpayers who are required to prepare and maintain audited financial statements are taxpayers with income exceeding AED50 million and qualified free zone persons.

Younis Haji Al Khouri, Undersecretary of the Ministry of Finance, said, “These decisions bring transparency, simplicity and clarity to the UAE’s corporate tax regime, facilitate compliance and minimize risks of tax avoidance and double non-taxation, and ensures a fair and good-for-all regulated tax environment.”