Corporate Tax – Tax Credits

Frequently Asked Questions

Amount paid as income taxes on behalf of employees by an employer or business entity are known as withholding taxes.

Some forms of income from the UAE paid to non-residents may be subject to a 0% withholding tax. Due to the 0% rate, in practice, neither UAE firms nor international beneficiaries of income from the UAE would be required to register or file any withholding tax-related documents.

Transactions between UAE residents are exempt from withholding tax.

Yes, The UAE CT due may be reduced by the amount of foreign tax paid on income that is also subject to UAE CT. The higher of the foreign tax paid and the UAE CT due on the applicable income is the maximum foreign tax credit. Any additional foreign tax credit cannot be transferred over to a future Tax Period or reversed.

The UAE CT obligation may be adjusted against withholding tax and other foreign taxes on income or profits, according to any restrictions that may be outlined in a relevant agreement or treaty.

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