Corporate Tax 2026 Comparisons

Businesses in the UAE generally adopt a corporate form, with Limited Liability Companies ("LLCs") being the most common. However, it is also very common for foreign businesses to operate through branches or as a Permanent Establishment ("PE"), especially in sectors requiring direct market access. The key difference is that while LLCs are separate legal entities with limited liability, branches and PEs are extensions of the parent company and do not have a separate legal personality. For tax purposes, LLCs are taxed as separate entities, whereas branches and PEs are subject to UAE corporate tax ("CT") on their locally sourced income.

In the UAE, transparent entities like partnerships and trusts are commonly used, particularly in the investment and financial sectors. Limited Partnerships ("LPs") and General Partnerships ("GPs") are popular for private equity and hedge funds due to their tax transparency and flexibility. Family Foundations, especially in ADGM and DIFC (economic zones in Abu Dhabi and Dubai respectively), are widely adopted for wealth management, estate planning, and investment holdings, offering structured governance while maintaining tax efficiency. Moreover, while, Real Estate Investment Trusts ("REITs") are not transparent by nature, they may qualify for exemption from UAE CT, which make this vehicle prevalent in real estate and asset management.

In the UAE, the tax residence of incorporated businesses is generally determined based on the place of incorporation or effective management and control. A company incorporated in the UAE is typically considered a UAE tax resident. However, even if incorporated elsewhere, a company may be deemed a UAE tax resident if its place of effective management and control is in the UAE. For transparent entities like partnerships and foundations, tax residence depends on where key management decisions are made, or where the entity is effectively controlled. Double Taxation Treaties (DTTs) may override domestic rules, often applying the "tie-breaker" test, which considers factors like the place of incorporation, effective management, and economic substance.

In the UAE, incorporated businesses are subject to a 9% CT on taxable income exceeding AED375 thousand, with income below this threshold taxed at 0%. Certain businesses, such as those in free zones, may benefit from tax exemptions if they meet qualifying criteria.

For businesses owned by individuals directly or through transparent entities (such as partnerships or sole proprietorships), taxation depends on whether the entity is considered a separate legal entity. If not, profits may be taxed at the owner’s level, with CT applying if the income arises from a business or commercial activity conducted in the UAE. However, personal income from employment, dividends, and capital gains remains tax-free for individuals.

In the UAE, taxable profits are generally based on accounting net profit or loss for the relevant tax period, as per the financial statements prepared in accordance with the provisions of Article 20 of UAE CT law, subject to certain tax adjustments. These profits are determined on an accruals basis, meaning income and expenses are recognised when earned or incurred, not when received or paid.

Key tax adjustments include:

• non-deductible expenses, such as fines, bribes, penalties, and certain entertainment costs;
• interest deduction limits, with net interest expense generally capped at 30% of Earnings Before Interest, Taxes, Depreciation, and Amortisation ("EBITDA");
• exempt income, including qualifying dividends, capital gains from eligible shareholdings, and certain foreign branch profits (subject to conditions); and
• transfer pricing adjustments, ensuring transactions between related parties follow the "arm’s length" principle.

Losses can be carried forward and offset against future taxable income, subject to conditions.

The UAE offers special tax incentives for technology investments, including full deductibility of Research & Development ("R&D") expenses and a planned R&D tax credit (30%-50%) from 2026 to encourage innovation. Qualifying Intellectual Property ("QIP") income, such as royalties from patents and copyrighted software, can benefit from a 0% CT rate, if the IP is developed or managed in the UAE, acting as a patent box regime.

Additionally, technology companies in Free Zones can enjoy a 0% tax rate on qualifying income, which includes revenue from IP licensing, certain software sales, and transactions with Free Zone or foreign clients, but excludes trademarks, as income from trademarks is taxable at the standard CT rate and does not qualify for preferential treatment under Free Zone or IP regimes.

However, income that does not meet the qualifying criteria may be subject to the standard 9% CT. In the UAE, trademarks are excluded from the definition of QIP, so income from trademarks does not benefit from the 0% Free Zone tax rate. Importantly, though, it is not treated as non-qualifying income, meaning it will not, by itself, disqualify a Free Zone entity from receiving the 0% rate on other qualifying income.

The UAE offers industry-specific tax incentives across Free Zones, financing, holding companies, investment funds, and innovation-driven businesses:

Free Zones & Industry-Specific Benefits

• 0% corporate tax on qualifying income in designated Free Zones, including tech, logistics, and financial services; and
• DIFC, Dubai Internet City, and Masdar City offer sector-specific advantages.

Financing & Holding Companies

• Interest expense is deductible, and Islamic finance is tax-neutral;
• holding companies benefit from participation exemptions on dividends and capital gains; and
• no withholding tax applies (but the rate is 0%) on interest, dividends, and royalties.

Investment Funds & Restructuring

• Qualifying Investment Funds ("QIF") enjoy tax exemptions if they meet regulatory conditions; and
• intra-group transfers and restructurings can be tax-free under specific conditions.

R&D & IP Incentives

• Full R&D expense deductibility and upcoming R&D tax credits (30%-50%) from 2026; and
• 0% corporate tax on QIP income (eg, patents, copyrighted software (ZS3.1)).

Energy & General Investment Benefits

• Extractive industries are taxed at the Emirate level, with incentives for renewables; and
• they incur no capital gains tax, no personal income tax, and have the capacity to access foreign tax credits.

In the UAE, tax losses can be carried forward indefinitely and used to offset up to 75% of taxable income in future tax periods, provided that at least 50% ownership continuity is maintained, or the business continues to operate in a similar manner following a change in ownership exceeding 50%. Tax loss carry back is not allowed, meaning losses cannot be applied to prior tax periods. Losses can generally be used to offset taxable income, but capital losses and ordinary business losses may be subject to specific restrictions depending on their nature. Additionally, losses can be transferred within a group under the following conditions:

• both companies must be resident juridical persons (not natural persons);
• there must be at least 75% common ownership between the entities (direct or indirect);
• neither company can be an exempt person or a Free Zone person benefitting from the 0% tax rate;
• both must be subject to UAE CT during the relevant period and use the same accounting standards; and
• the loss transfer is allowed only up to 75% of the taxable income of the receiving company.

In the UAE, businesses can deduct the greater of AED12 million, or 30% of adjusted EBITDA, for net interest expenses. Any disallowed interest expenses can be carried forward for up to ten tax periods for future deductions. Interest on related party loans used for dividends, share buybacks, capital contributions, or acquiring related businesses is not deductible, unless the taxpayer proves there was no tax avoidance intent. Banks, insurers, and certain infrastructure projects that meet government criteria are exempt from these interest deduction limits.

In the UAE, companies under common ownership can form a tax group, allowing them to be treated as a single taxable entity if they meet the following conditions:

• a Parent Company must directly or indirectly own at least 95% of the share capital, voting rights, and entitlement to profits and net assets in each subsidiary; and
• all group members must be UAE-resident juridical persons, have the same financial year, and use the same accounting standards; and
• exempt persons and Qualifying Free Zone Persons ("QFZP") cannot be included in a tax group.

If tax consolidation is not chosen, groups can still benefit from tax loss transfers where one entity can transfer losses to another if there is at least 75% common ownership, provided that both entities are UAE-resident juridical persons, they meet the same financial year and accounting standards requirements, and neither should be an exempt person or QFZP. This allows separate companies within a group to utilise losses while maintaining their individual tax filings.

In the UAE, capital gains from selling shares in another corporation are taxed differently depending on whether the investment is domestic or foreign:

Domestic Investments

Capital gains from selling shares in UAE-resident companies are exempt from CT, with no conditions. This means businesses can freely trade shares of local companies without incurring tax liabilities.

Foreign Investments

Capital gains from foreign shareholdings can be exempt under the Participation Exemption, provided the seller holds a minimum holding of 5% of the shares and voting rights in the “participation interest” (ie, the entity from which the income is derived) – they should be entitled to at least 5% of the profits available and the liquidation proceeds.

The seller must also have held the shares for at least 12 months, or, alternatively, the acquisition cost of the ownership interest must be at least AED4 million, and the foreign company is subject to a tax rate of at least 9% in its jurisdiction.

If these conditions are not met for foreign investments, the capital gains are subject to the standard 9% CT rate.

Aside from CT, an incorporated business in the UAE may also be liable for Value Added Tax ("VAT") at 5% on most goods and services it supplies. Customs duties can apply to imported goods, while excise tax is levied on specific products such as tobacco, carbonated beverages, and energy drinks. Additionally, certain transactions, like property or share transfers, might incur registration fees or stamp duties depending on the emirate and nature of the transaction. Although withholding tax exists, its rate is generally 0%, so it typically (at this stage) does not add to the tax burden on transactions.

In the UAE, incorporated businesses are generally subject to CT at 9% but may also face additional taxes depending on their activities and location. Branches of foreign banks are subject to emirate-level CT, which range from 20% to 55%, depending on the emirate – this applies separately from federal CT. Similarly, oil and gas companies are taxed at up to 55% under emirate-specific rules.

Most closely held local businesses in the UAE are structured as corporate entities, typically as LLCs or free zone companies, rather than operating as non-corporate businesses like sole proprietorships. This preference is driven by the benefits of limited liability and a formal, stable legal framework that facilitates access to financing and investment.

As of now, the UAE does not impose personal income tax on individuals, so professionals such as architects, engineers, consultants, and accountants do not pay income tax on their earnings. The CT, effective for financial years starting on or after 1 June 2023, applies a 9% tax on profits exceeding AED375 thousand. There are no specific rules preventing individuals from incorporating to benefit from potential tax efficiencies, as the primary tax burden relates to corporate earnings above the threshold. However, with the CT regime just beginning, additional compliance requirements and anti-avoidance regulations may be introduced in the future to address such practices.

There are no specific rules in the UAE that prevent closely held corporations from retaining earnings for investment purposes. Unlike some other jurisdictions, the UAE does not impose an accumulated earnings tax or similar penalty on undistributed profits. The CT law focuses on taxing profits above certain thresholds, rather than regulating how earnings are used. This approach is designed to encourage reinvestment and support business growth.

In the UAE, individuals are not taxed on dividend income because there is no personal income tax. Similarly, any capital gains realised from the sale of shares in closely held corporations are not subject to tax. Consequently, individuals receive dividends and realise gains on share sales without incurring additional personal tax liabilities.

Individuals in the UAE are not taxed on dividends from publicly traded corporations, as there is no personal income tax. Likewise, any gains realised by the individual from the sale of shares, including capital gains, are not subject to tax.

In the UAE, withholding taxes on interest, dividends, and royalties are levied at a statutory rate of 0% in the absence of income tax treaties. This 0% rate means that, in practice, these payments are not subject to any tax. Consequently, there are no additional reliefs available since the effective rate is already zero.

The UAE has an extensive network of tax treaties with over 90 jurisdictions, which helps provide certainty and favourable tax treatment for foreign investors. Key treaty countries often include major financial centres such as the United Kingdom, the Netherlands, and Singapore, along with other developed economies like Germany, France, etc.

While the UAE tax authorities generally accept the use of treaty country entities, they do scrutinise arrangements that appear artificial or solely aimed at securing treaty benefits. Authorities focus on ensuring that these entities have genuine tax residency and meet economic substance requirements in the treaty jurisdiction. In practice, properly structured entities that comply with local and treaty rules are not typically challenged.

For inbound investors operating through a local UAE corporation, the primary transfer pricing issues include establishing robust "arm’s-length" pricing for related party transactions – such as intercompany financing, service fees, and royalty arrangements – in the absence of extensive local guidance.

Valuation challenges can arise due to the UAE’s unique economic environment, making comparability analyses and the selection of appropriate transfer pricing methods critical. In addition, comprehensive documentation is essential to support pricing decisions and comply with evolving international standards and local economic substance requirements. Finally, ensuring consistency with both UAE and home jurisdiction transfer pricing rules is vital to minimise the risk of adjustments or penalties.

In the UAE, local authorities will typically accept related-party limited risk distribution arrangements if they are well-documented and reflect genuine business functions at "arm’s length". However, if these arrangements appear to be primarily structured to shift profits or fail to meet substance requirements, they may be scrutinised. Robust transfer pricing documentation and clear functional analyses are key to mitigating potential challenges. Overall, while the UAE has a relatively liberal tax regime, compliance with both international transfer pricing principles and local substance rules is essential.

Based on the latest available information, the UAE’s transfer pricing approach remains broadly aligned with the OECD arm’s length principle, though the regime is still maturing and is less detailed compared to many Organisation for Economic Cooperation and Development ("OECD") jurisdictions. Enforcement tends to rely more on economic substance and general anti-avoidance measures, rather than on exhaustive transfer pricing documentation requirements. While this may seem less rigourous, it also means that the UAE authorities focus on ensuring that transactions reflect genuine business activities and are not solely structured for tax avoidance. However, given that tax policies can evolve, it is advisable to consult current local guidance, or a UAE tax professional, for the most up-to-date details.

UAE tax authorities are increasingly focused on transfer pricing compliance, but since the first tax exercise began in 2024, there are no prior years to re-open using new information. International transfer pricing disputes resolved through double tax treaties and the Mutual Agreement Procedure ("MAP") process remain relatively infrequent.

While there has been a modest increase in enquiries, MAP cases are still relatively limited compared to jurisdictions with more established transfer pricing regimes. Overall, the emphasis is on ensuring robust compliance going forward, rather than revisiting historical periods.

Under the current UAE regime, compensating adjustments, as typically seen in other jurisdictions, are not explicitly provided for when settling transfer pricing claims.

Under the UAE CT regime, both a local branch of a non-local corporation and a local subsidiary (a separate UAE-incorporated company) of a non-local corporation are generally subject to the same 9% rate on taxable income exceeding AED375 thousand. The key difference lies in how profits are recognised and allocated:

• a local branch is taxed on the profits attributable to its UAE activities, as it is not a separate legal entity from its foreign parent; and
• a local subsidiary is a separate legal entity and is taxed on the profits it generates in – or is otherwise attributable to – the UAE, subject to the specific rules of the CT law.

However, the statutory tax rate itself does not differ solely because one entity is structured as a branch and the other as a subsidiary. The compliance and filing obligations can vary somewhat (for example, a subsidiary files its own return, while a branch may file as the permanent establishment of its foreign parent), but both face the same basic CT regime.

Under the current UAE tax framework, capital gains on the sale of shares in local corporations are generally not taxed for non-residents. This applies even when the gain is derived from selling shares of a non-local holding company that directly owns local corporate stock.

Applicable tax treaties should also typically be consulted to confirm this treatment. Consequently, both direct and indirect capital gains are not taxed in the UAE for gains earned by non-resident investors under the current UAE CT law.

Under the current UAE tax regime, there are no specific change-of-control provisions that trigger tax or duty charges solely because of a change in ownership, even for the disposal of an indirect holding high up in an overseas group. Transactions are generally only taxed based on UAE-sourced income rather than the mere fact of a change in control. No additional stamp duties or re-assessments are triggered by such disposals under federal tax law.

Under the current UAE CT framework, there is no statutory requirement to use specific formulas to determine the income of foreign-owned local affiliates selling goods or providing services. Instead, taxable income is determined on an "arm’s-length" basis, with affiliates expected to substantiate their income and expenses in accordance with general tax principles and transfer pricing guidelines.

The "arm’s length" principle is applied, meaning the expense must reflect what independent parties would pay for similar services. The local affiliate must demonstrate that the management or administrative expense was incurred wholly and exclusively for generating UAE-sourced income, and that it provided a commensurate benefit. Adequate documentation supporting the nature, amount, and necessity of the services rendered is essential. Essentially, the deduction is only allowed if the expense is justified and aligned with market conditions, ensuring no artificial profit shifting.

Foreign-owned local affiliates borrowing from non-local affiliates must follow the "arm’s length" principle, meaning that interest rates and terms should match those agreed upon by independent parties. Adequate documentation is required to demonstrate the loan’s commercial substance and genuine business purpose. There are no fixed statutory ceilings or prescribed rates, but transactions must reflect market conditions. UAE authorities may adjust the terms if they deviate from "arm’s length" standards, ensuring that interest deductions are justified. In addition, in the UAE, net interest expense is generally deductible up to 30% of the taxable EBITDA, with a "safe harbour" threshold of AED12 million of net interest expense per tax period.

Local corporations in the UAE are taxed on their worldwide income, including foreign-sourced income. This foreign income is not exempt but is subject to the same CT rate, with potential relief through foreign tax credits or treaty benefits to avoid double taxation. Any taxes paid abroad may be credited against the UAE tax liability if the relevant conditions are met. The exact application depends on the nature of the foreign income and the provisions of applicable double tax treaties.

Since foreign income is fully taxable under the UAE CT regime, there is no specific disallowance of expenses attributable to foreign income. All expenses incurred in generating taxable income, whether domestic or foreign, are generally deductible if they meet standard requirements and are properly documented. When expenses relate to both domestic and foreign income, they must be reasonably allocated between the two sources. In effect, there are no additional non-deductibility rules triggered by foreign income because it is taxed along with domestic income.

Dividends received by local corporations from foreign subsidiaries are included in the local income for UAE CT purposes. However, to mitigate double taxation, foreign tax credits may be available if the income was already taxed in the foreign jurisdiction. In certain circumstances, provided specific conditions and documentation requirements are met, some dividends might benefit from preferential tax treatment or exemptions.

Under the UAE CT regime, the participation exemption allows local corporations to receive dividends from foreign subsidiaries free from additional UAE taxation, provided that specific criteria such as minimum ownership thresholds and holding period requirements are met and the dividend has been subject to tax abroad.

Intangibles developed by local corporations that are used by non-local subsidiaries must be transferred at "arm’s length", and any income derived from such transfers (eg, as royalty payments) is subject to UAE CT (unless it constitutes qualifying income and meets all QFZP requirements). If the pricing does not reflect market conditions, transfer pricing adjustments may be made to ensure that the income is appropriately taxed.

Local corporations in the UAE are not subject to Controlled Foreign Company-type ("CFC-type") rules, meaning they are not taxed on the income of their non-local subsidiaries; the foreign subsidiary’s income is taxed only in its own jurisdiction, and dividends repatriated to the local parent may benefit from participation exemptions. In contrast, non-local branches of local corporations are not separate legal entities, so their income is consolidated with the parent’s worldwide income and taxed accordingly under the UAE CT regime.

Local tax rules in the UAE do not impose direct substance requirements on non-local affiliates. However, if a non-local affiliate operates through a UAE permanent establishment or otherwise engages in UAE-based activities, that entity must comply with applicable economic substance regulations. For non-local affiliates that remain entirely abroad, local substance rules generally do not apply.

Local corporations are generally taxed on the capital gain from the sale of shares in non-local affiliates, although they may be eligible for a participation exemption if specific conditions are met, such as minimum ownership thresholds, holding periods, and the non-local affiliate being subject to an adequate level of tax. If these conditions are not satisfied, the gain is included in the taxable income and subject to the standard UAE CT rate of 9%.

Yes, the UAE CT framework incorporates overarching anti-avoidance provisions, including general anti-avoidance rules and economic substance requirements, to counter arrangements that lack genuine commercial substance and are primarily designed to secure tax benefits. Additionally, transfer pricing rules and specific measures targeting certain transactions enable authorities to scrutinise and adjust artificial arrangements to ensure they reflect true economic activity.

The UAE Federal Tax Authority ("FTA") uses a risk-based approach rather than a fixed routine audit cycle, meaning audits are not scheduled at regular intervals for all taxpayers. Audits are typically triggered by risk indicators, discrepancies in filings, or through random sampling. Companies are required to maintain detailed records and documentation to support their tax positions, and the FTA may request additional information if needed. Overall, while there is no fixed cycle, maintaining robust compliance is essential to navigate potential reviews.

As is clear from the above, the UAE has implemented several Base Erosion & Profit Shifting ("BEPS") changes, including the introduction of a comprehensive CT framework that aligns with OECD and international standards.

Economic substance rules and updated transfer pricing guidelines have been put in place to ensure that profits are taxed where economic activities occur. Additionally, the UAE has implemented the OECD Pillar Two framework, introducing a Domestic Minimum Top-Up Tax ("DMTT"), applicable as from financial years beginning on, or after, 1 January 2025 for multinational groups within scope. These measures are complemented by existing country-by-country reporting obligations applicable to large multinational groups. Together, they reflect the UAE’s alignment with international tax transparency standards and its commitment to the OECD BEPS initiatives.

The UAE government has taken a proactive stance on BEPS, integrating measures like economic substance rules and a CT framework to balance international compliance with its investment-friendly environment. Its goal is to curb profit shifting and ensure taxation occurs where genuine economic activity takes place, while still maintaining competitive tax rates to attract business. Pillar Two operates in tandem with the CT regime, ensuring a global minimum tax for multinationals, whereas Pillar One may have a more limited immediate impact given the UAE’s current tax structure. Overall, these changes will most affect large multinationals that will need to enhance their reporting and compliance efforts to meet global standards.

International tax matters generally have a lower public profile in the UAE compared to other jurisdictions, allowing policymakers to implement BEPS recommendations without significant domestic political pressure. The government is focused on maintaining its reputation as a global business hub while meeting international standards and ensuring transparency. As a result, BEPS measures are being integrated primarily through technical and regulatory reforms rather than public debate, ensuring smooth compliance with global expectations. This pragmatic approach helps balance international obligations with the UAE’s goal of remaining an attractive investment destination.

The UAE government is committed to maintaining a competitive tax environment while adopting BEPS recommendations in a calibrated manner. By integrating measures such as economic substance rules and the CT framework, alongside targeted exemptions and a low effective rate, the government aims to meet international standards without undermining its appeal as a global business hub.

The UAE is not subject to EU state aid rules, and its frameworks are designed to align with international standards, mitigating such risks. To date, there have been no significant disputes or challenges in this area, with the system largely praised for its balance between competitiveness and compliance. Moving forward, the government is expected to continuously review and adjust its policies in light of BEPS pressures to ensure the regime remains both attractive and robust.

Currently, the UAE tax regime does not have dedicated provisions specifically targeting hybrid instruments, but there is awareness of international trends and proposals emerging from the BEPS process. Any future changes are likely to be implemented through targeted amendments to the CT framework, which will be designed to address hybrid mismatches while preserving the UAE’s competitive tax environment and aligning with global anti-abuse standards.

The UAE’s CT regime is not strictly territorial. However, the UAE has implemented interest deductibility limitations aligning with OECD BEPS Action 4. Net interest expense is generally deductible up to 30% of the taxable EBITDA, with a "safe harbour" threshold of AED12 million of net interest expense per tax period.

Disallowed interest can be carried forward for up to ten years, subject to conditions. Additionally, interest paid to related parties may be further restricted unless a valid business purpose test and "arm’s length" conditions are met, as per Article 30 of the law and relevant transfer pricing guidelines.

Consequently, investors and companies might need to adjust their financing structures once these proposals are implemented, though any changes will likely seek a balance between curbing tax avoidance and maintaining market attractiveness.

The UAE’s CT regime is not strictly territorial, however the need for traditional CFC rules is less pressing, as foreign income is generally only taxed if and when repatriated or connected to UAE economic activity. However, while the general intent behind CFC proposals – to curb profit shifting – is sound, any measures adopted in the UAE need to be carefully calibrated to avoid inadvertently penalising genuine cross-border business activities and undermining the jurisdiction’s competitive tax advantages

DTC limitations on benefits and anti-avoidance rules are designed to ensure that tax treaty benefits are granted only to genuine investors and may impact transactions that are structured primarily for tax avoidance. However, given the UAE’s favourable tax environment, including a 0% withholding rate on many cross-border payments, the practical impact for bona fide inbound and outbound investors is generally limited. Investors should ensure that their structures meet substance requirements and align with "arm’s-length" standards to fully benefit from treaty provisions.

The BEPS-driven changes have increased the emphasis on robust transfer pricing documentation and economic substance, but they have not radically altered the UAE’s competitive and business-friendly tax regime. Likewise, the taxation of profits from IP is managed through standard "arm’s length" and substance principles, and it has not emerged as a significant source of controversy, provided that transactions are properly structured and documented.

The UAE fully supports transparency measures, including country-by-country reporting for larger multinational enterprises. The jurisdiction has implemented country-by-country reporting as part of its commitment to international tax standards and information exchange. This approach helps maintain its reputation as a responsible tax jurisdiction, while preserving its competitive environment. Overall, the UAE balances transparency with an attractive, business-friendly tax framework.

Currently, the UAE has not introduced specific measures targeting the taxation of transactions or profits from digital economy businesses operating largely from outside its jurisdiction. The focus remains on ensuring that taxation applies only when there is substantial economic presence in the UAE, and while international discussions under BEPS, Pillar One, and Pillar Two are ongoing, no significant changes have been proposed in this area to date.

The UAE has maintained a balanced stance on digital taxation, emphasising that its tax regime applies only to businesses with a genuine economic presence in the country. To date, no specific digital taxation proposals have been introduced, with the jurisdiction opting to align with international frameworks such as BEPS and monitoring the developments under Pillar One and Pillar Two.

Currently, the UAE has not implemented separate provisions specifically for the taxation of offshore IP deployed within the country. Instead, any income derived from such IP is taxed as part of a local corporation’s overall income under the standard CT framework, without a distinct withholding tax or direct assessment imposed on the IP owner. The regime does not differentiate between IP owners based on whether they are in tax havens or in countries with a double tax treaty, so long as the income is attributable to UAE-based activities. The focus remains on applying the "arm’s length" principle and standard CT rules to all income.