Resident person: what it means in UAE tax.

What resident person means

Also called: Resident Person for Corporate Tax, UAE tax resident company.

A Resident Person is one of the two kinds of Taxable Person under the UAE Corporate Tax Law, the other being a Non-Resident Person. Article 11(3) lists who is resident: any company or other juridical person set up under UAE law, including free zone entities; a foreign company that is effectively managed and controlled in the UAE; and an individual who conducts a Business or Business Activity in the UAE.

Residence decides the tax base. A resident company is taxed on its income from inside and outside the UAE. A resident individual is taxed only on income connected with the business they run here, and only once business turnover passes AED 1,000,000 in a calendar year. A non-resident, by contrast, is taxed only on UAE-linked income such as profits of a Permanent Establishment.

For most SMEs the answer is simple: a UAE LLC or free zone company is resident from day one. The harder cases are foreign holding companies run from Dubai and individuals with side businesses. Corporate Tax residence is also a different question from the residence tests used for a Tax Residency Certificate.

How it works

• UAE incorporated or established juridical persons, including Free Zone Persons, are resident (Article 11(3)(a)).
• A foreign juridical person is resident if it is effectively managed and controlled in the UAE (Article 11(3)(b)).
• A natural person is resident while conducting a Business or Business Activity in the UAE (Article 11(3)(c)), and is taxable only above AED 1,000,000 of business turnover in a calendar year (Cabinet Decision No. 49 of 2023, Article 2).
• Resident juridical persons are taxed on income from the UAE and from outside the UAE (Article 12(1)).
• A UAE branch of a resident person is treated as the same Taxable Person, not a separate one (Article 11(5)).

Worked example

A Dubai mainland consultancy LLC earns AED 900,000 of Taxable Income from UAE clients and AED 300,000 from a project for a client in Oman, delivered from Dubai. As a resident juridical person, both amounts are in its tax base.

Taxable Income from UAE clients	AED 900,000
Taxable Income from the Oman project	AED 300,000
Total Taxable Income	AED 1,200,000
Less 0% band	AED (375,000)
Amount taxed at 9%	AED 825,000
Corporate Tax before any foreign tax credit	AED 74,250

Foreign income is not left out for a resident company; any tax paid abroad on it may be credited under Article 47.

Common mistakes

• Leaving foreign-sourced income out of a UAE company's return because it was earned abroad.
• Assuming a foreign-registered company run day to day from Dubai is outside UAE Corporate Tax.
• Treating Corporate Tax residence and a Tax Residency Certificate as the same test.

The law

• Federal Decree-Law No. 47 of 2022 on the Taxation of Corporations and Businesses, Article 11(2) to (5) (Taxable Person)
• Federal Decree-Law No. 47 of 2022, Article 12(1) and (2) (Corporate Tax Base) and Article 47 (Foreign Tax Credit)
• Cabinet Decision No. 49 of 2023 on Specifying the Categories of Businesses or Business Activities Conducted by a Resident or Non-Resident Natural Person that are Subject to Corporate Tax, Article 2

Frequently asked questions

Is a free zone company a Resident Person?

Yes. Article 11(3)(a) expressly includes Free Zone Persons. Whether it pays 0% on some income is a separate question under the Qualifying Free Zone Person rules.

Is an employee living in Dubai a Resident Person for Corporate Tax?

Not because of their salary. Wages are not treated as business income for Corporate Tax (Cabinet Decision No. 49 of 2023, Article 2(2)).

Related terms

Taxable person · Permanent establishment · Tax residency certificate · Qualifying Free Zone Person · Withholding tax. See every term in the UAE tax glossary.

For the full picture, read our guide: UAE Corporate Tax for Freelancers and Sole Establishments: When It Applies to You.

Need help with Corporate Tax filing? See our Corporate Tax filing service.